USA markets have followed crude oil prices lower, as some key components of the Dow and S&P 500 show weakening during the second quarter of the year.
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Market intelligence firm Genscape reported that stockpiles at the Cushing, Oklahoma delivery hub for US crude futures fell 89,071 barrels during the week to August 2, traders who saw the data said.
The U.S. Energy Information Administration said Wednesday that U.S. crude inventories, excluding the Strategic Petroleum Reserve, increased by 1.4 million barrels during the week of July 29.
Preliminary weekly production data showed that U.S.’ crude production fell flat to less than 8.5 million bpd.
Analysts believed that investors bought the dip also contributed to the rebound.
Standard Chartered bank said there was “no fundamental justification for recent oil price falls” and that “the global oil market has rebalanced, and U.S. crude supply and inventories are expected to fall”. Prices were at around $40.05 prior to the release of the inventory data.
“In the last 72 hours, there have been reports of successful negotiations to re-open blockaded oil terminals in Eastern Libya and USA airstrikes against Daesh (ISIS) in Sirte”.
Other analysts said high crude and product output would continue to weigh on markets and that as a result, refiners were likely to reduce orders for new crude feedstocks, affecting demand for oil.
The dollar was up slightly on Thursday, remaining a non-factor to oil’s moves.
West Texas Intermediate for September delivery was at US$40.39 a barrel on the New York Mercantile Exchange, 33 United States cents higher, at 12:59 p.m. London time. But it added that oil’s most recent decline came amid supportive factors such as the dollar weakening and refining margins for gasoline widening.
Brent crude, the global benchmark, rose 0.89 per cent to $42.17 per barrel in late morning trading. Energy stocks climbed early as the price of crude oil recovered. Prices rose 3.1 percent to $43.10 a barrel on Wednesday.
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Hedge funds slashed their positive bets on USA crude to a five-month low during the week to July 26, while holding a record net short, or bearish position, on gasoline.
