Oil Rises to Two Month High as US Stockpiles Fall
by Bloomberg | Julia Fanzeres and Alex Longley
click here to read this article at Rigzone.com
*this article was not written by Roseland Oil & Gas
Oil rose to the highest in about two months as US inventories, Chinese stimulus and an attack on a Russian refinery ignited a rush of trend-following algorithmic buying.
West Texas Intermediate climbed 3% to top $77 a barrel, breaking out of the narrow range it has been trading in for months. Commodity-trading algorithms helped extend the rally after WTI passed $76.20. The US benchmark’s next resistance level is its 200-day moving average, which is about 30 cents above today’s close.
A slew of bullish factors propelled crude higher on Thursday. US crude inventories fell by more than 9 million barrels last week to the lowest level since October. Meanwhile, a drone attack caused a fire that damaged a major refinery on Russia’s Black Sea coast on Thursday. That followed another strike that endangered Russian crude flows earlier this week.
In China, the government said it will cut the reserve-requirement ratio for banks within two weeks and hinted that more support measures could follow, aiding the outlook for energy consumption in the world’s largest crude importer.
Leading up to Thursday’s trading, crude had traded in a narrow band as geopolitical tensions in the Red Sea had been largely offset by expectations that non-OPEC producers will continue to increase supplies.
“Crude is breaking above short-term resistance as technical and fundamental data points have improved,while geopolitical dynamics have gotten worse,” said Rebecca Babin, a senior energy trader at CIBC Private Wealth. “Sentiment remains quite bearish, so there is some room to run here if things continue to improve from a fundamental perspective.”
Prices:
- WTI for March delivery rose $2.27 to settle at $77.36 a barrel.
- Brent for March settlement climbed $2.39 to settle at$82.43 a barrel.
by Bloomberg | Julia Fanzeres and Alex Longley
click here to read this article at Rigzone.com
*this article was not written by Roseland Oil & Gas