LONDON – Oil prices climbed more than $1 on Wednesday, posting gains in overnight after industry data, US crude stocks tumbled more than last week in the wake of two storms, as demand improved. Exposed tight supply.
Prices were also supported as some OPEC members struggled to ramp up production and by a general feeling of lack of energy markets amid the electricity and gas crisis in Europe.
US West Texas Intermediate (WTI) crude futures rose $1.07, or 1.5 per cent, to $71.56 a barrel as of 0911 GMT, having gained 35 per cent from Tuesday.
Brent crude futures rose $0.95, or 1.3 per cent, to $75.31 a barrel after gaining 44 cents on Tuesday.
After Monday’s pressure from broader markets over a possible default by Chinese property developer China Evergrande Group, the oil market’s focus turned to concerns of tight supplies.
Ravindra Rao, Vice President, Commodities at Kotak Securities, said, “Crude is supported by API weekly report, in which US crude stocks declined more than expected.”
“Prices are still ahead of the EIA weekly report later today and ahead of the US Federal Reserve’s monetary policy decision … In the near term, crude may move along with major markets, with a focus on China and Fed policy.” Huh.”
Traders, citing Tuesday’s data from the American Petroleum Institute, said US crude stocks fell by 6.1 million barrels for the week ended September 17.
This was a much larger than expected drop. The market will keep an eye on the US government data on Wednesday to confirm the fall.
“Given the variety of contributing factors in the energy sector, particularly skyrocketing natural gas prices … the price decline is likely to be short-lived,” said Jeffrey Haley, an analyst at brokerage OANDA.
Global gas prices are expected to break records this winter.
by Dmitry Zhdannikov
This News Originally From – The Epoch Times