Oil prices rose about 1 percent or more on Thursday after tracking a rally in gasoline futures sparked by a delayed restart of the main gasoline line at Colonial Pipeline, the No. 1 carrier for the motor fuel in the United States.
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Brent crude futures LCOc1 settled up US74 cents, or 1.6 per cent, at $US46.59 a barrel, after a session high at $US47. Most currency traders do not think there will be hike this month but are betting the Federal Reserve will raise rates before the end of the year.
The price of oil has been caught in one of its most volatile couple of weeks in months after OPEC and rival Russian Federation hinted they may discuss a possible output freeze, as demand slows and a global surplus becomes more entrenched.
Oil prices rose as much as 2 percent on Thursday, tracking a surge in gasoline futures and higher US equity markets that helped stem a two-day rout in crude futures.
U.S. West Texas Intermediate futures were up 6 cents, or 0.1 percent, at $43.64 a barrel. “It would be the U.S. We would be back soon enough in a situation where the U.S. will move toward its previous boom-rate of growth and therefore start absorbing market share again”, Wood Mackenzie analyst Ann-Louise Hittle said.
Global crude oil prices edged up, today, after two consecutive days of losses, with gains capped by returning supplies from Nigeria and Libya.
Gasoline futures shot up after sources said BP Plc will cut production this weekend by at least 50% on the large crude distillation unit for repairs at its 413,500 barrel per day Whiting, Indiana refinery.
“If OPEC were to cut its production in Algiers, or really freeze its production, then prices would rise, and what producer would benefit the most rapidly from those high prices?”
Crude prices fell about 3 percent for a second straight day, yesterday, following a 4.6 million barrel build-up in USA distillates inventories.
“Also, we’re undeniably in the $US40-$US50 a barrel range, which means when we get below $US45, we are most likely to bounce up”.
The Algeria meeting is expected to tackle the supply glut although many analysts remain doubtful that a deal can be reached to freeze or slash output.
Libya’s National Oil Corporation is lifting force majeure at three ports and exports will resume immediately at two of them, it said on Thursday. In Nigeria, offers for October-loading of its Qua Iboe crude have emerged even as a force majeure remains in place.
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“The market could care less about strong physical markets when it sees potential for another 600,000 barrels per day of crude”, Scott Shelton, broker with ICAP in Durham, North Carolina, said, referring to the anticipated rise in Libyan and Nigerian supplies.
