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Oil prices increased Thursday, on track for a second straight day of increases after a weekly government report showed a big increase in U.S. crude-oil inventories but declines in stockpiles of processed fuels.
Light, sweet crude for December delivery was recently 1.4% higher at $57.03 a barrel on the New York Mercantile Exchange.
Brent crude was up 1.6% at $67.18 a barrel.
Highlight
EIA supply report: U.S. oil inventories rose by 10.3 million barrels in the week ended Nov. 9, to reach 442 million barrels, the highest total since December 2017, the Energy Information Administration said Thursday. But while that headline number is quite bearish, the EIA’s report showed total inventories of crude oil and petroleum products like gasoline declined bullishly.
Libya production: Investors were closely watching global developments, and some recent news has been bearish. Oil output in Libya has jumped to 1.28 million barrels a day, the head of the country’s National Oil Corp. said on Wednesday. This is more than double the June level, when Libya’s eastern ports had been shut by a rogue general.
Oil prices have come under pressure on expectations of oversupply.
Photo:
raheb homavandi/Reuters
Insight
U.S. data: Thursday’s EIA data, released a day later than normal due to Veterans Day, was undoubtedly bearish in terms of the 10.3-million-barrel rise in crude oil inventories. But Kyle Cooper, a consultant at ION Energy Group in Houston, said the overall report was price-supportive. “Despite the massive crude build, total U.S. petroleum inventories fell 2.8 million barrels, as 1.371 million barrels came out of the Strategic Petroleum Reserve and other components fell dramatically,” he said. “Overall, despite the huge headline crude build, this was considered a bullish overall report.”
Recent plunge: Oil’s gains Thursday may also suggest some investors feel a recent 25% plunge in crude oil prices—including a record 12 straight sessions of declines through Tuesday—was overdone, and that too much emphasis may have been placed on worries about future weakening demand, which may not pan out. “As far as real oil demands, [there are] no signs of a real slowdown and no sign of the so-called oil glut,” said Phil Flynn at Price Futures in Chicago. “While it may happen, we know that seasonal demand should kick in and start drawing down supply soon.”
AHEAD
Baker Hughes
releases its weekly rig-count report on Friday.
Write to Dan Molinski at [email protected]
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