Oil rises on expected fall in U.S. inventories, geopolitical tensions

Updated: Wed, Oct 18, 2017
03:52 pm
Reuters
RELATED NEWS
Oil steady as Saudi Arabia pledges to play 'responsible role' in market Oil steady as Saudi Arabia pledges to play 'responsible role' in market
Asian shares struggle as European woes, Saudi concerns dim mood Asian shares struggle as European woes, Saudi concerns dim mood
Gold nudges up as Asian shares edge lower Gold nudges up as Asian shares edge lower
Arconic weighs $11 billion offer from Apollo - sources Arconic weighs $11 billion offer from Apollo - sources
Uber's dealmaking chief Poetzscher resigns Uber's dealmaking chief Poetzscher resigns

Oil prices rose on Wednesday as weekly U.S. crude inventories are expected to have fallen steeply and geopolitical tensions around oil-rich Iraq and Iran raised risk premiums.

International benchmark Brent crude futures were trading 41 cents higher at $58.29 a barrel at 1002 GMT.

U.S. West Texas Intermediate (WTI) crude futures traded at $52.03 a barrel, up 15 cents on the day.

Weekly U.S. crude inventories fell by 7.1 million barrels in the week to Oct. 13 to 461.4 million barrels, the American Petroleum Institute (API) said late on Tuesday.

Official U.S. fuel inventory data is due later on Wednesday from the government`s Energy Information Administration.

"There are market expectations for a bullish EIA inventory report this afternoon so Brent is heading towards $60 a barrel again," said Hans van Cleef, senior energy economist at ABN Amro.

Oil market investors were also closely following developments in the Middle East, where tensions in northern Iraq were threatening to disrupt oil flows.

Iraqi government forces captured the major Kurdish-held oil city of Kirkuk earlier this week, responding to a Kurdish independence referendum.

"It remains to be seen whether the Kurds, after withdrawing from the region they claim to be entitled to, will allow crude oil to be transported by pipeline across their territory to the Turkish Mediterranean port of Ceyhan," said analysts at Commerzbank.

The Iraq crisis adds to a looming dispute between the U.S. and Iran. U.S. President Donald Trump last week refused to certify Iran`s compliance over a nuclear deal, leaving Congress 60 days to decide further action against Tehran.

During the previous round of sanctions against Iran, some 1 million barrels per day of oil was cut from global markets.

A technical pattern known as a "Golden Cross" was approaching in WTI crude oil contracts on Wednesday, in which the 50-day moving average climbs higher than the 200-day. This is widely seen as a bullish price indicator, and already occurred with Brent futures on Sept. 25.

(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)

By continuing to use the site, you agree to the use of cookies. You can find out more by clicking this link

Close