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Crude oil advanced as an attack on Saudi oil companies combined with declining stocks in the United States helped bulls push oil higher.
Futures in New York rose 0.5% on Thursday. The geopolitical risk premium in the market has increased as Saudi Arabia temporarily suspended oil deliveries via the Bab el-Mandeb Strait after two oil tankers were attacked by the Yemeni Houthi militia. US crude oil inventories are at their lowest level since 2015 and trade tensions between the United States and the European Union have eased.
"These are all bullish events for the barrel," said Michael Loewen, commodities strategist at Scotiabank. in Toronto. "The market is starting to realize that the geopolitical risk will not go away anytime soon."
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This month, investors assessed the US and China and how they could weaken demand of oil. At the same time, traders are also considering the promise of OPEC to inject more oil and US sanctions against Iran. US policies may weigh on crude prices in the near term, but this does not represent a reversal of the uptrend in oil, with crude likely to retest $ 80 a barrel later this year, according to Goldman Intermediate. The implied volatility of WTI futures in September fell to $ 31.61 per barrel on the New York Mercantile Exchange.
The implied volatility of WTI futures dropped to its lowest level since last March.
Also: Bab el-Mandeb, a new base for Middle East flows
Brent for September added 61 cents to close the session at $ 74.54 a barrel on the ICE Futures Europe Exchange based in London. Brent traded a $ 4.93 premium to WTI. The options on Brent's September deal expire on Thursday.
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The two ships, each with a capacity of 2 million barrels of oil, belong to the Arabian Strait Bab el-Mandeb, off the coast of Yemen, Djibouti and Eritrea, connects the Red Sea to the Arabian Sea and is one of the main waterways of the world for the crude oil and other petroleum products. Saudi Arabia can still use its East-West mega-pipeline to transport crude oil from its fields in the Persian Gulf to Yanbu City on the Red Sea, bypassing the strait and keeping the European market within reach. hand.
Market News:
- Gasoline futures rose 1.9% to $ 2.1623 per gallon, the highest level in more than three weeks .
- U.S. President Donald Trump says he's close to granting a waiver allowing the sale of ethanol E-15 year-round.
- OPEC shipments will be reduced to 24.47 million barrels a day in the four weeks leading up to August 11 compared to the period up to July 14, said oil-tanker Oil Movements in a weekly report.
- Midland WTI crude was traded at the lowest level in almost four years, as the Permian's increasing pipeline capacity to deliver the Permian was available.
- ConocoPhillips is in in talks with Petroleos de Venezuela SA to settle a $ 2.04 billion arbitration decision and put an end to a global legal war between the two oil producers.
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Read Unhealthy Climb as Saudis Suspend Expeditions After Attack of a Tanker on bloomberg.com
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