Oil climbs as EIS signals fifth consecutive decline in US crude inventories

The price of oil climbed on Wednesday as the US benchmark was revived after a government report revealed a fifth consecutive weekly decline in US crude inventories.

The decrease in supplies was lower than expected on the market, but it contradicted the increase reported Tuesday by a trade group.

Traders have also weighed down expectations of lower global production due to the imminence of US sanctions against Iran, as well as the prospects for energy demand in the wake of a trade dispute. growing between the United States and China.

The American reference, October West Texas Intermediate crude

CLV8, + 1.16%

rose 86 cents, or 1.2%, to $ 70.71 a barrel on the New York Mercantile Exchange. The contract, which expires at Thursday's trade, is trading at $ 70.41 before supply data.

November Brent

LCOX8, + 0.22%

the global benchmark added 16 cents, or 0.2%, to $ 79.19 per barrel on ICE Futures Europe, a day after reaching 1.3%.

The Energy Information Administration reported on Wednesday that the country's crude supplies were down 2.1 million barrels for the week ending 14 September. The EIA had reported declines in each of the previous four weeks.

Analysts surveyed by S & P Global Platts had forecast a drop of 3 million barrels, but the US Petroleum Institute announced Tuesday an increase of 1.25 million barrels, according to sources.

"Although the number of refineries has dropped by 442,000 [barrels per day] while falling into the maintenance of the falls, the refining activity remains high, with flows exceeding 800,000 [barrels-a-day] Matt Smith, Director of Commodity Research at ClipperData, added that the 2017 figures were "blurred by Hurricane Harvey." "Crude stocks are thwarted by rising exports. " he said.

According to EIA, gasoline inventories fell by 1.7 million barrels a week, while distillate inventories increased by 800,000 barrels. The S & P Global Platts survey showed supply declines of 1.6 million barrels for gasoline and 282,000 barrels for distillates, including fuel oil.

On Nymex, the essence of October

RBV8, + 0.40%

added nearly 0.3% to $ 2.01 a gallon, but heating oil in October

HOV8, + 0.20%

paid close to 0.3% to $ 2,229 per gallon.

Prior to a weekly update of US procurement data scheduled for Thursday October

NGV18, -0.41%

traded at $ 2.919 per million British thermal power stations, down 0.5%.

Tariq Zahir, a board member of Tyche Capital Advisors, said the 10-year Treasury Bill yield

TMUBMUSD10Y, + 0.58%

increased by more than 3%.

"If we continue to see this rise – and coupled with the trade war – we could see stock markets deteriorate, with a slowdown in global growth if the trade war has reached a higher level," said Zahir. "Even with the Iranian barrels [expected] To exit the market, the global macroeconomic situation could dampen crude oil demand at the end of the year. "

Major oil producers, including Russia, are wondering how to ensure market stability once US sanctions against Iran are imposed in early November. Iran is the third largest oil producer and a member of the Organization of Petroleum Exporting Countries.

President Donald Trump decided in May to withdraw from the nuclear deal with Tehran.

On Tuesday, oil prices were raised by a report indicating that Saudi Arabia – the leader of OPEC – is increasingly accustomed to the prospect of a rise in Brent prices above $ 80 on barrel.

OPEC and other producers, including Russia, will meet on 23 September in Algeria to discuss how best to distribute the planned increases to offset the estimated 1.4 million barrels of production loss in Iran. per day, according to S & P Global Platts Analytics.

Increasing tensions between Russia, a major producer of non-OPEC crude oil, and Israel also contributed to gains for oil on Tuesday. Russia accused Israel of having lost its reconnaissance planes shot down at night by Syrian defense systems.

Meanwhile, market players continue to follow the evolving trade tensions between the United States and China, the two largest economic powers. The escalating trade tensions can hurt the demand for crude.

China has announced tariffs of 5 to 10% on 60 billion US dollars in retaliation for the import duties announced by Washington on 200 billion dollars of Chinese products. Both sets of rates are expected to come into effect on September 24.

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