USA crude settled at $43.49 per barrel, up $1.78 or 4.3 percent, while Brent crude closed $1.99, or 4.5 percent, higher at $46.04, after both jumped more than 5 percent during the session. “Yet oil prices were able to march on regardless”.
Advertisement
Last week, the U.S. Commodity Futures Trading Commission (CFTC) said short positions in WTI rose to 218, 623 for the week ending on August 2, the highest amount since 2006.
Traders were also awaiting US rig count data at 1 p.m. ET (1700 GMT), as six weeks of additions, the longest streak of additions in a year, have stoked glut fears.
The International Energy Agency (IEA) said Thursday demand growth is expected to slow from 1.4 million barrels per day (MMBPD) in 2016, to 1.2 MMBPD in 2017, as underlying support from low oil prices wanes. The S&P 500’s energy index finished up 0.6% amid strong gains at oil and gas companies.
The market push has been attributed to a statement by Saudi Arabia’s Energy Minister Khalid al-Falih, saying that oil producers are expected to discuss price stabilisation during a meeting in Algeria in September.
Brent for October settlement increased as much as 26 cents, or 0.6 per cent, to $46.30 a barrel.
Baker Hughes reported that USA crude oil rigs rose by 15 this week, and now total 396.
Despite the output fall in China, the world’s biggest energy consumer, the market impact is mixed as its refined product exports are increasing. Since hitting a four-month high at 97.62 in late-July, the Dollar has fallen back by approximately 2%. To this extent, European and U.S. oil refineries may have no alternative but to cut down on their output as a way of dealing with the problem.
Oil prices had entered a “bear” market last week on oversupply concerns, falling more than 20 percent and closing below $40 a barrel for the first time since April.
Iran slashed its September official selling price for light crude to Asia by $1.30 a barrel, the latest sign that exporters are willing to accept discounts in return for market share.
Advertisement
And a report from the Organization of Petroleum Exporting Countries (OPEC) this week showed Saudi Arabia’s July oil production at a record high of almost 10.5 million barrels per day. The report was somewhat shocking, given the fact that a global oil market oversupply thanks to increased production was instrumental in sending oil futures to 13-year lows earlier in the year.
