Business

Oil Prices Jump on Gasoline Draw

Oil Prices Jump on Gasoline Draw

Brent crude futures, the global benchmark for oil prices, were trading at $55.52 per barrel at 0758 GMT, up 40 cents, or 0.7 percent, from their last close.

"Clearly increased shale production is now taking its toll", he said, adding if the Energy Information Administration's crude inventory numbers, due later in the global day, show a large build, prices could fall further. US oil output will surge next year to the highest level since 1970, according to an EIA report Tuesday. In my opinion, OPEC's compliance levels and U.S oil production will continue to have a major impact on oil (NYSEARCA:OIL) (NYSEARCA:BNO) (NYSEARCA:UWTI) (NYSEARCA:DWTI) (NYSEARCA:SCO) (NYSEARCA:UCO) (NYSEARCA:DBO) and prices may remain volatile in short term. Nevertheless, shipments of US crude oil to Asia are set to jump in February, and may result in a supply surplus and lower regional Asian grade prices, traders and analysts reckon.

EIA previously reported that commercial crude inventories in the United States increased by 13.8 million barrels. Oil prices are likely to swing between minor gains and losses in the coming days.

Oil prices rose on Thursday, boosted by an unexpected draw in USA gasoline inventories, although bloated crude supplies meant that fuel markets remain under pressure.

"We've seen a sea change of sentiment in gasoline", John Kilduff, a partner at Again Capital, a New York-based hedge fund that focuses on energy, said by telephone.

PM Modi redefines SCAM
Earlier in the day, PM Modi addressed a poll rally in Uttar Pradesh's Meerut district and hit out SP, Congress and BSP. The rally was held at the Shatabdi Nagar Ground in Meerut which is opposite to the RSS institute of Madhav Kunj.

In my previous article, I had stated that rising crude oil and gasoline inventories along with rising U.S oil production will put downward pressure on oil prices in near future. Should this be the case, February would see the highest USA crude oil exports on record so far. Asia-bound crude cargoes from West Africa are also on the rise, and may well reach in February their highest level in at least five and a half years.

Oil has fluctuated above $50 a barrel since a deal to trim output between the Organization of Petroleum Exporting Countries and 11 other nations took effect on January 1. "They are an indication of stronger U.S. demand".

Iran recently reported that they have set guidance for their production of 4 million bpd by the end of March.

"U.S. gasoline draws are supporting prices today", said Tamas Varga, senior analyst at London brokerage PVM Oil Associates.


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