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US Crude Shrugs Off Bigger-Than-Expected Supply Build, Investors Wait for OPEC

Summary:
Crude oil futures shrugged off the bigger-than-expected increase in domestic inventories as investors wait for the latest announcement from the Organization of the Petroleum Exporting Countries (OPEC). US crude prices have been able to remain above the crucial level this week, with the energy commodity trading relatively sideways since the start of the trading week. December West Texas Intermediate (WTI) crude oil futures rose %excerpt%.31, or 0.72%, to .74 per barrel at 15:04 GMT on Wednesday on the New York Mercantile Exchange. Despite their volatility this month, US crude prices have risen more than 4% this month, paring their year-to-date decline to below 32%. Brent, the international benchmark for oil prices, topped midweek. January Brent crude futures picked up %excerpt%.54, or 1.23%,

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Crude oil futures shrugged off the bigger-than-expected increase in domestic inventories as investors wait for the latest announcement from the Organization of the Petroleum Exporting Countries (OPEC). US crude prices have been able to remain above the crucial $40 level this week, with the energy commodity trading relatively sideways since the start of the trading week.

December West Texas Intermediate (WTI) crude oil futures rose $0.31, or 0.72%, to $41.74 per barrel at 15:04 GMT on Wednesday on the New York Mercantile Exchange. Despite their volatility this month, US crude prices have risen more than 4% this month, paring their year-to-date decline to below 32%.

Brent, the international benchmark for oil prices, topped $44 midweek. January Brent crude futures picked up $0.54, or 1.23%, to $44.31 a barrel on London’s ICE Futures exchange. Brent prices have also staged a rally in November, climbing about 6%. In the home stretch of 2020, Brent is down 33%.

According to the US Energy Information Administration (EIA), domestic crude stockpiles increased by 800,000 barrels for the week ending November 13. This was much larger than the market forecast of 100,000 barrels.

Crude inventories at the Cushing, Oklahoma storage facility climbed by 1.2 million barrels. Gasoline supplies jumped by 2.6 million barrels, while distillate inventories slumped by 5.2 million barrels.

Last week, the Baker Hughes oil rig count remained above 200 for the fourth consecutive week, bringing the total rig count to more than 300. This suggests that US oil and gas firms are restarting activities.

Investors are optimistic that OPEC and its allies, OPEC+, will be flexible in response to global crude market needs. Although no formal recommendation has been made ahead of the November 30-December 1 policy meeting, Saudi Arabia has suggested that producers adapt to the changing landscape. OPEC+ is scheduled to relax restrictions on output on January 1, but the resurgence in coronavirus cases has led to speculation that crude-rich nations will postpone the decision. However, as Libya continues to boost production capabilities to as much as one million barrels per day (bpd), some countries do not want to lose market share.

That said, traders are betting on a delay in the expected crude output increase by three to six months? It might be a bit more complicated as Pfizer and Moderna have announced two coronavirus vaccines with high success rates in preventing the highly infectious respiratory illness.

In other energy commodities, January natural gas futures tacked on $0.02, or 0.7%, to $2.864 per million British thermal units (btu). December gasoline futures picked up $0.0152, or 1.32%, to $1.1684 per gallon. December heating oil futures surged $0.0375, or 3.03%, to $1.2768 a gallon.

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Andrew Moran
I am a full-time professional writer. Prior to my self-employment, I worked as a reporter for Digital Journal covering the politics beat and The Toronto Times reporting on the city’s entertainment scene. I currently write mostly about business, marketing and finance

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