A few analysts expect a small rebound as traders take advantage of the low prices.
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US gasoline futures rose more than 1 percent to $1.29 a gallon after a report that Irving Oil’s planned restart of the gasoline-making unit at its 300,000-barrels-per-day refinery in St. John, New Brunswick had been delayed beyond the November 15 target.
Crude tumbled after the EIA data showed the eighth straight week in builds leaving inventories at 487.3 million barrels, within a hair of the April record of 490.9 million.
Domestic refineries processed 2.501 million bpd of crude, higher than the August level of 2.214 million bpd.
While geopolitical tensions in the oil-producing Middle East tend to be a bullish factor for oil because of potential disruptions to supply, many expected that the Paris attacks would crimp economic activity in Europe, in part by reducing travel on the continent.
If you are in a position, you should have your finger on the pulse …
After gains on Monday, the first trading day after the deadly attacks in Paris, “we’re back on the supply side of the picture, we’re seeing a stronger dollar as well, ‘ said Matt Smith of ClipperData”.
But today’s oil drillers are nimble, allowing them to quickly ramp up production once prices rise. ICE gas oil changed hands at $428.75 a metric ton, up $13.75 from the previous settlement.
Total gasoline inventories increased by 1 million barrels last week, according to the EIA, and remain well above the upper limit of the five-year average range.
Already, weak crude value has forced several locally-based energy companies to cut workforces by the thousands, and new forecasts of falling demand are likely to extend the trend – a situation likely to be exacerbated by increased production in the U.S. It suggests bearish momentum for crude oil prices.
Crude has dropped by nearly half in the past year as the Organisation of Petroleum Exporting Countries pumped above its collective quota and Russian output rose to a post-Soviet high, outpacing demand growth.
Crude oil prices settled higher in futures market on Monday. Notably, the same report also confirmed almost $70 billion in additional capital that could be put towards energy production, exploration, and investments.
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“Iraq and Iran still have a few of the most accessible oil reserves for development, and while on a global scale oil sector investment will decline, it may actually increase in Iran and Iraq”, Barden said. For instance, the United States Short Oil (NYSEArca: DNO) tracks the opposite moves of the West Texas Intermediate crude oil futures, and the DB Crude Oil Short ETN (NYSEArca: SZO) also tracks the simple inverse of oil.
