At around 0600 GMT, USA benchmark West Texas Intermediate (WTI) for delivery in December was down six cents to US$41.68, reversing gains in the morning.
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The price for Brent rose by 1 percent to $45.04 a barrel on London’s ICE Futures exchange on Tuesday.
Thankfully, a growing number of lawmakers on Capitol Hill recognize the critical nature of crude oil exports, culminating last month in bipartisan legislation that passed the U.S. House in a 261-159 vote.
He said however that “prices may not rise as much” because of the crude oversupply.
While it seems odd that the USA supply capabilities, which reached 10 million barrels per day early in the year had reached only about half of the nation’s oil derivatives demand (gasoline, diesel, jet fuel, heating oil, etc.), ordinarily this would mean that such growth opportunities would act as an instrument of increased energy needs.
Oil prices retreated on Monday, failing to hold on to gains won earlier in the day on geopolitical tensions sparked by the deadly terror attacks in Paris.
Domestic oil production was, at that time, suffering a steady (and many thought irreversible) decline and our economy was becoming increasingly dependent on imports from unstable regions of the world.
In Singapore, EY analyst Gupta said a global supply glut and fears of a slowing European economic recovery were persisting, putting downward pressure on prices.
“There is no material threat to the oil-producing facilities and transit routes in the Middle East from the escalation of the French military effort in Syria”, it said.
Oil prices were up on Wednesday after data released that the USA showed crude inventories were lower than expected.
Internationally traded Brent crude futures were at $44.50 a barrel, up 36c. US commercial crude inventories increased by 300,000 barrels last week, maintaining a total USA commercial crude inventory of 487.3 million barrels.
“So, oil prices continue to remain depressed by the still-high supply of the stuff and weaker demand prospects”, he said. “As refineries ran flat out to meet soaring demand for gasoline in top consumers in the United States and China … inventories ballooned … while motorists are responding to cheaper gasoline by purchasing bigger cars and taking to the roads”.
USA gold futures for December delivery settled up 0.3 per cent at $US1,083.60 an ounce. Diesel futures slid 1.7 cents, or 1.2%, to $1.3681 a gallon, the lowest settlement since April 2009.
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“The market is actively seeking storage solutions”, Jefferies said in a note, but with January 2017 prices around $6 a barrel above those for January 2016, the spread is too low to make floating storage attractive as freight costs still have to be included.
