Oil Price - October 7
Posted: Fri Oct 07, 2016 6:13 am
Crude closed above $50 per barrel on Thursday for the first time since early June, but can oil hold above this key level?
U.S. crude futures rose 1.2% to $50.44 per barrel, the highest settlement since June 9.
Sweet 16> Continental Resources (CLR) climbed 0.8%, EOG Resources (EOG) edged 0.25% lower, and Diamondback Energy (FANG) added 0.4%.
Since spring, every time West Texas Intermediate crude has topped the $50 mark, it repeatedly dropped back below that level soon after. But oil prices are finding support after the Energy Information Administration said Wednesday that U.S. inventories fell by 2.98 million barrels for the week ended Sept. 30. Analysts expected a 2.6 million-barrel increase.
Phil Flynn, senior market analyst at the Price Futures Group, said Thursday that in the short term prices are "vulnerable to pull back" but thinks prices will be steadily above $50 by the end of the year.
Hurricane Matthew, which has already caused major damage in the Caribbean, is taking aim for the Florida and the East Coast and could play a major role in short term prices, Flynn says"If the storm doesn't do a lot of damage that would be bullish for prices," he said. "You'll see shipments of crude to the U.S. delayed by four days to three weeks."
But if the storm wrecks havoc on the U.S. it would hit demand and drag down prices.
The producers meeting in Istanbul Oct. 8-13 would also be bullish on prices as it gives investors another sign that the deal is serious.
Analysts said earlier this week that oil prices likely wouldn't stay above $50 until next year.
Brian Youngberg, an energy analyst at Edward Jones, said via email that his company expects to see oil prices staying in the mid-to-high 40s before rising above the $50 ceiling next year.
Raymond James is forecasting $60 oil by year-end.
U.S. crude futures rose 1.2% to $50.44 per barrel, the highest settlement since June 9.
Sweet 16> Continental Resources (CLR) climbed 0.8%, EOG Resources (EOG) edged 0.25% lower, and Diamondback Energy (FANG) added 0.4%.
Since spring, every time West Texas Intermediate crude has topped the $50 mark, it repeatedly dropped back below that level soon after. But oil prices are finding support after the Energy Information Administration said Wednesday that U.S. inventories fell by 2.98 million barrels for the week ended Sept. 30. Analysts expected a 2.6 million-barrel increase.
Phil Flynn, senior market analyst at the Price Futures Group, said Thursday that in the short term prices are "vulnerable to pull back" but thinks prices will be steadily above $50 by the end of the year.
Hurricane Matthew, which has already caused major damage in the Caribbean, is taking aim for the Florida and the East Coast and could play a major role in short term prices, Flynn says"If the storm doesn't do a lot of damage that would be bullish for prices," he said. "You'll see shipments of crude to the U.S. delayed by four days to three weeks."
But if the storm wrecks havoc on the U.S. it would hit demand and drag down prices.
The producers meeting in Istanbul Oct. 8-13 would also be bullish on prices as it gives investors another sign that the deal is serious.
Analysts said earlier this week that oil prices likely wouldn't stay above $50 until next year.
Brian Youngberg, an energy analyst at Edward Jones, said via email that his company expects to see oil prices staying in the mid-to-high 40s before rising above the $50 ceiling next year.
Raymond James is forecasting $60 oil by year-end.