Oil Gains Focus In The Market After Weak Stockpile Data
By Anatol Thomas
After facing weeks of weakness, oil prices rose after a noticeable decrease in the US stockpiles. The increase in the US shale oil production is one of the main reasons for the decrease in oil prices. The recent EIA inventory data offered some support to oil prices. The WTI crude futures instantly gained $1.04 and was trading at $46.97 per barrel. The oil price has finally gained significantly after facing losses for almost 4 months.
According to the EIA inventory report, the US inventory stockpile decreased by 5.25 million barrels just in the last week. The expectations were around a decrease of 1.98 billion barrels. Even though the API figures dropped yesterday, the market didn’t respond immediately.
The increase in the oil prices also helped the energy shares to gain in the market. The S&P 500 index also exhibited an upward movement in the market today. The treasury yields also increased which helped the US dollar to gain in the market.
The US benchmark, however, went down by 55 cents as the investors are worried about the rebound in the US Shale oil production. The major oil producers globally have agreed to OPEC deal to cut down the production. The increased US production has derailed all the efforts so far.
Cushing in Oklahoma is the key delivery spot for Nymex crude and the supplies reduced by 438,000 barrels. The gasoline inventories also fell by 150,000 barrels. The distillate inventories also reported a decline of 1.6 million barrels.
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