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US Crude Tops $61 on Surprise Oil Supply Build, Investors Brace for OPEC Meeting

Summary:
Crude oil futures climbed above in the middle of the trading week as the energy commodity found support on a bullish US government supply report. US crude prices have been struggling this month, poised to record a minuscule monthly loss. With crude contracts experiencing a correction in recent weeks, can April act as a catalyst for a renewed rally? May West Texas Intermediate (WTI) crude futures surged %excerpt%.56, or 0.92%, to .11 per barrel at 15:35 GMT on Wednesday on the New York Mercantile Exchange. US crude is on track for a March decline of 0.1%, but it is still up 26% year-to-date. Brent, the international benchmark for oil prices, is also rising midweek looking to retest . June Brent crude futures tacked on %excerpt%.29, or 0.45%, to .46 a barrel on London’s ICE Futures exchange.

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Crude oil futures climbed above $61 in the middle of the trading week as the energy commodity found support on a bullish US government supply report. US crude prices have been struggling this month, poised to record a minuscule monthly loss. With crude contracts experiencing a correction in recent weeks, can April act as a catalyst for a renewed rally?

May West Texas Intermediate (WTI) crude futures surged $0.56, or 0.92%, to $61.11 per barrel at 15:35 GMT on Wednesday on the New York Mercantile Exchange. US crude is on track for a March decline of 0.1%, but it is still up 26% year-to-date.

Brent, the international benchmark for oil prices, is also rising midweek looking to retest $65. June Brent crude futures tacked on $0.29, or 0.45%, to $64.46 a barrel on London’s ICE Futures exchange. Brent will post a March gain of about 0.8%, bringing its 2021 gain to 25%.

According to the US Energy Information Administration (EIA), domestic inventories of crude oil decreased by 876,000 barrels, better than the market forecast of an 107,000-barrel build. This is the first weekly slide in six weeks.

Stockpiles at the Cushing, Oklahoma storage facility increased 782,000 barrels. Gasoline supplies plunged 1.735 million barrels, while distillate stocks climbed 2.542 million barrels.

On Thursday, the Organization of the Petroleum Exporting Countries (OPEC) and its allies, OPEC+, will hold its monthly meeting on Thursday. Investors will be waiting to see if the cartel will maintain its production curbs through the month of May or ramp up output.

Because OPEC+ slashed its forecast for 2021 oil-demand growth by 300,000 barrels, market analysts widely anticipated that the group would keep the production quotas intact at least for another month. Also, earlier this week, Russian officials revealed that they would be comfortable with OPEC+ maintaining current policy, changing a previous position of increasing production.

In other industry news, China has agreed to buy one million barrels per day (bpd) of sanction-discounted crude oil in May. Beijing has been purchasing cheap crude from Tehran as sanctions cripple the Islamic Republic regime. China and Iran recently established a 25-year $400 billion deal as part of Beijing’s Belt and Road Initiative that would see Tehran export more oil and gas to the world’s second-largest economy.

On Thursday, the Baker Hughes oil rig count for the week ending April 1 will be released. It continues to increase with each passing week, surpassing 300 for seven consecutive weeks.

In other energy commodities, May natural gas futures dropped $0.018, or 0.69%, to $2.605 per million British thermal units (btu). May gasoline futures dipped $0.0024, or 0.12%, to $1.9988 a gallon. May heating oil futures slipped $0.0058, or 0.32%, to $1.7972 per gallon.

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Published under: Oil

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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