Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

UPDATE 9-U.S. oil prices rise above $60/bbl on tightening supply

Published 2019-03-20, 03:24 p/m
Updated 2019-03-20, 03:24 p/m
© Reuters.  UPDATE 9-U.S. oil prices rise above $60/bbl on tightening supply

© Reuters. UPDATE 9-U.S. oil prices rise above $60/bbl on tightening supply

* U.S. crude stockpiles fall unexpectedly and heavily

* Mixed signals on U.S.-China trade progress jangle nerves

* Rating firm S&P lifts oil price assumptions

(Updates with settlement prices, adds commentary)

By Stephanie Kelly

NEW YORK, March 20 (Reuters) - U.S. crude prices rose on Wednesday to a 4-month high above $60 a barrel after U.S. government data showed tightening domestic oil supplies, but gains were capped by concerns over global economic growth due to the ongoing U.S.-China trade war.

The front-month U.S. West Texas Intermediate (WTI) crude CLc1 futures contract, which expired Wednesday, gained 80 cents, or 1.36 percent, to settle at $59.83 a barrel. It hit a session high of $60.12 a barrel, the highest since Nov. 12.

The more-active second-month WTI benchmark CLc2 gained 94 cents, or 1.6 percent, to settle at $60.23 a barrel.

International Brent crude LCOc1 rose 89 cents, or 1.32 percent, to settle at $68.50 a barrel.

Prices rose after the U.S. Energy Information Administration posted a large and unexpected drop in crude inventories due to strong export and refining demand. EIA/S

Stockpiles USOILC=ECI fell 9.6 million barrels last week, compared with analysts' expectations for an increase of 309,000 barrels. The draw was the largest since July 2018 and brought stockpiles to their lowest since January. and distillate inventories both fell by more than expected. Gasoline stocks USOILG=ECI fell by 4.6 million barrels, while distillate inventories USOILD=ECI fell by 4.1 million barrels.

"The report is bullish due to the large crude oil inventory drawdown, which was a function of low import levels and high export volumes," said John Kilduff, a partner at Again Capital LLC in New York. "The across-the-board inventory declines in crude oil and refined products highlights the tightening market."

Crude prices have risen almost a third this year, pushed up by supply cuts among the Organization of the Petroleum Exporting Countries and its allies including Russia, as well as U.S. sanctions against oil exporters Iran and Venezuela.

The United Arab Emirates's energy minister said he expects OPEC to finalize the long-term cooperation charter with its non-OPEC partners in June. agency S&P Global (NYSE:SPGI) raised its Brent oil price assumptions back up to $60 a barrel on Wednesday, on the back of the production cuts by OPEC and Russia. an eight-month trade war between China and the United States has worried global markets already concerned by signs of a slowdown in economic growth this year.

There have been mixed signals whether the standoff between the world's top two economies can soon be resolved.

Washington announced that Treasury Secretary Steven Mnuchin plans to travel to China next week for another round of trade talks with senior officials. trade talks continue to present a binary risk for the oil market and other risky assets," BNP Paribas (PA:BNPP) strategist Harry Tchilinguirian told the Reuters Global Oil Forum.

Analysts said an economic slowdown could soon dent fuel consumption, holding back crude.

Asian business confidence held near three-year lows in the first quarter as the U.S.-China trade war dragged on, pulling down a global economy that is already on a downward path, a Thomson Reuters/INSEAD survey found.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.