Expectations of firm demand for crude have continued to provide significant support for oil prices over the past 24 hours with benchmark prices hitting the strongest level for over a month.
Oil prices were subjected to choppy trading following the latest EIA inventories release with the larger than expected increase in oil inventories offset by a record decline in gasoline stocks.
Crude prices continued to gain support from confidence in the demand outlook amid expectations of firmer global growth conditions. There was also further positive sentiment following the latest IEA monthly report which revised up its demand forecasts.
Oil prices also gained some support from supply disruptions in Venezuela and Iraq.
Overall, there were solid gains later in the New York session with an initial move to the $49.0 p/b level. WTI peaked around $49.35 p/b late in US trading on Wednesday as Brent traded above $55.0 p/b.
Prices edged lower in Asian trading with weaker than expected releases for Chinese industrial production and retail sales having some negative impact on energy prices.
There was, however, solid support on dips and WTI pushed sharply higher to the $49.50 area ahead of the US open. The dollar’s rally had paused which helped underpin energy prices, although the US currency moved higher again ahead of the New York open.
There was further momentum ahead of the US open with WTI trading close to $49.80 p/b and the highest level for over a month while Brent advanced to $55.70.
OPEC rhetoric will remain in focus amid further speculation that there could be an extension of curbs to oil production for at least another 3 months. There is the potential for further volatile trading, especially with further uncertainty surrounding the impact of hurricane Irma.
WTI Oil Price 4-Hour Chart