Oil hits highest since 2014 amid optimism over tightened supply
New York: Oil surged to the highest intraday level since December 2014 amid optimism global markets are finally tightening.
Futures extended gains to as much as 1.7% in New York. A key US government report on Wednesday is expected to show crude stockpiles dropped for an eighth straight week. That would be the longest decline for this part of the year since the winter of 2007-2008.
“Production cuts and demand are continuing to rebalance the market. As we break through technical levels, you’re getting further speculative length coming into the market,” Gene McGillian, a market research manager at Tradition Energy in Stamford, Connecticut, said by telephone.
Oil in New York has traded above $60 a barrel and the international benchmark Brent has held above $66 since December as the Organization of Petroleum Exporting Countries (Opec) and allied suppliers capped output.
West Texas Intermediate for February delivery jumped 88 cents to $62.61 a barrel at 11.58am on the New York Mercantile Exchange after touching $62.80. Brent for March settlement climbed 75 cents to $68.53 on the London-based ICE Futures Europe exchange. The global benchmark crude traded at a premium of $5.90 to March WTI.
US crude stockpiles at the Cushing, Oklahoma, pipeline hub probably fell by 1.5 million barrels last week, according to a forecast compiled by Bloomberg. Inventories at Cushing dipped below 50 million barrels through the week ended 29 December, the first time they have dropped below that level since February 2015, according to the most recent Energy Information Administration data.
“The market is anticipating a pretty good draw in the crude oil storage number,” Bob Yawger, director of futures at Mizuho Securities USA Inc. in New York, said by telephone.
The industry-funded American Petroleum Institute is scheduled to release its stockpiles data on Tuesday.
- Gujarat verdict big boost for Congress, Rahul Gandhi will lead party to victory in 2019: Ahmed Patel
- Europe readies riposte to Trump’s ‘America First’ push in Davos
- Commercialise use of ISRO’s lithium-ion battery for electric vehicles: Govt panel
- Private banks split over proposal to remove cap on foreign holding
- Govt to make company registration process more faster