Crude Oil Prices Rally on a Slightly Weaker US Draw

The crude oil market traded higher on Thursday after facing a slight decline during the trading session on Wednesday following the release of U.S. crude inventory numbers. 

The U.S. West Texas Intermediate and Brent crude traded lower during the previous trading session at around $62 and $67 per barrel respectively due to reports of a possible demand in the United States as the markets awaited the release of the crude inventory data.

US Crude Inventory

In the midst of the efforts of the Organization of Petroleum Exporting Countries to prevent a global crude oversupply as well as stabilize oil prices to more normal levels, the growing crude inventories and production in the United States have offset the efforts of the organization and other participating countries to push oil prices higher. 

The markets have also raised various concerns on the current production level of the United States which is currently the second biggest producer in the world.

However, since the second half of March until beginning of the month, production in the United States has slightly inched down reports of a weaker drilling activity in the U.S. led by the possible sanctions to be imposed by the United States against Iran. 

While the American Petroleum Institute posted a slightly higher crude supply for the week that ended in March, oil prices were able to recover at the beginning of the month when Saudi Arabia announced its plans to propose an extension of the OPEC cuts until 2019. The current OPEC cuts are set to last until the end of 2018.

This week, the U.S. Energy Information Administration stated a decline of 4.6 million barrels last week in commercial crude inventories in the U.S. The American Petroleum Institute also stated that gasoline inventories rose by 1.1 million barrels while commercial crude inventory remained to be in the lower half of the average range this 2018. Analysts initially expected a jump of 246,000 barrels for the same week.

Oil prices bounced from Wednesday’s lows on Thursday following a mixed crude inventory report. The U.S. West Texas Intermediate which was down by around 1.7% during the previous trading session before it traded at $62.29 after the release of the EIA report. The WTI also opened higher during the most recent trading session at $63.60 per barrel. 

The London Brent crude for June delivery also traded 0.4% higher or 27 cents at $68.29 per barrel from previously trading around the $67 per barrel during the previous trading session.

Read More: Oil Prices in Asia Surge Amidst Middle East Tension 

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