On Thursday Brent Crude Oil prices surged above $87 for the first time since April as the earlier day data showed a decline in US inventories.
By 1922 GMT Brent Crude features were up by 21 cents or 0.2% at $87.55 dollar per barrel. In a trade thinned by the US Independence Day Holiday, US West Texas firms were up 18 cents at $84.06. In its previous session since April 30, Brent gained 1.3% to settle at $87.34 for its highest close. While its counterpart WTI settled at an 11-week high of $83.88.
These gains were followed by a decline in US stocks. A 12.2 million draw in US inventories was reported by US Energy Information Administration. The sources had expected a draw of 6,80,000 barrels. RBN analyst Martin King quoted “Traders were tracking the war in Gaza and also the elections in France and Britain.”
He further added people are tracking the physical market and geopolitical situation. PVM analyst Tamas Varga quoted “Oil prices had earlier dipped to as low as 83 cents but the dip will not last long, given the dollar weakness and a brighter outlook for US fuel demand. Germany’s industrial orders declined sharply as the growth for the Europe’s largest economy remains elusive. Analysts said the weaker economic data could hasten the rate cuts by the US Federal Reserve and it could be supportive for oil markets.
According to two sources familiar with the loading plan agencies reported that Russia’s oil producers Rosneft and Lukoil will sharply cut oil exports from the Black Sea port of Novorossiysk in July. Saudi Arabia’s Aramco on the other hand cut the price for the flagship Arab light crude oil that it will sell to Asia in August to $1.80 a barrel above the Oman/Dubai average. Asia which accounts for 80% of Saudi’s oil exports, has faced a potential price reduction. It underscores the pressure faced by OPEC producers as non-OPEC supply continues to grow while the global economy is on the downfall. Citing OPEC+ production cuts and a decline in oil inventories, this Quarter Swiss Bank UBS expects the price of Brent Crude to reach $90 per barrel.
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