Geopolitical factors, meanwhile, are adding positive risk pressure to crude oil prices.
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The relatively dovish minutes from the September meeting may bolster arguments that the FOMC could wait as long as March of next year before lift-off. USA crude stocks rose by 3.1 million barrels to 461 million last week as refineries reduced production and idled capacity.
Benchmark 10-year Treasuries were down 12/32 in price to yield 2.100 per cent, up 4 basis points from late on Wednesday. This technology can’t make money unless oil sells for at least $60 per barrel.
Oil prices were also boosted by the upbeat remarks from the Organisation of the Petroleum Exporting Countries (OPEC).
The bank said, however, that “a rapid drawdown of the observed backlog of uncompleted wells could lead to higher production later this year and in 2016”. (BHI – Analyst Report) reported that the USA oil-rig count dropped by 26 to 614 in the prior week. OPEC continues to pump above its collective production target while U.S. stockpiles remain about 100 million barrels above the five-year average.
U.S. West Texas Intermediate (WTI) crude futures CLc1 were trading at $49.79 per barrel at 0008 GMT, up 16 cents from their last settlement.
“The key technical indicators are positive”, said Robin Bieber, director of London brokerage PVM Oil Associates, adding: “It is not advised to be short”.
This outlook will be underpinned by sustained United States and India growth momentum, continued recovery in Europe and Japan as well as a moderate, rather than sharp slowdown, in China. This is another factor that may indicate a few near-term upside in oil.
The secretary general for OPEC echoed the statement made by Sada when he said Sunday that investors can be optimistic for the oil industry’s future. Three-month aluminium increased to US$1,611.50 a tonne from US$1,560.
Is demand picking up, is supply drying up or is something else going on?
“The U.S. has shown bullish oil demand growth for the first eight months of this year, with gasoline and jet fuel leading gains”.
However, PIRA Energy Group, a closely watched forecaster that predicted the collapse in oil prices a year ago, sees crude prices at US$70 per barrel by the end of 2016 and US$75 a barrel in 2017, said Reuters.
“The market has just realized the extent of the USA crude oil production decline and is pricing this in”, said Daniel Ang, oil analyst at brokerage Phillip Futures.
Oil advanced in New York after its biggest loss in a week on speculation that lower prices will eventually curb global oversupply and re-balance world markets.
However, a few regard the bear market in oil may still be in its early stages.
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“OPEC is confident that it will see a more balanced market in 2016”, Badri told an oil and gas conference in Kuwait City.
