Oil rises above US$72 after US rules out using strategic reserve
TOKYO: Oil rose to above $72 a barrel after the U.S. government said it isn’t considering a release from the nation’s strategic crude reserves to temper prices, raising the prospect of tighter supplies as sanctions on Iranian exports kick in this November.
Futures in New York climbed as much as 1.4 percent. Prices on Wednesday pared declines after U.S. Energy Secretary Rick Perry said releasing oil from the Strategic Petroleum Reserve would have “a fairly minor and short-term impact” and that other producers can offset supply losses from Iran.
Meanwhile, government data showed nationwide crude inventories in America rose for the first time in six weeks.
The U.S. benchmark is nearing four-year highs after the Organization of Petroleum Exporting Countries signaled they are in no rush to boost output to counter supply losses in Iran and elsewhere, drawing repeated criticism from President Donald Trump.
The outlook for tightening supplies prompted top trading houses to predict the return of the high prices last seen in 2014, and banks including Bank of America Corp. and JPMorgan Chase & Co. lifted their forecasts.
“The U.S. using the strategic reserves as an emergency response tool to control oil prices was a bit of a stretch, given the history of how it was released in the past for war or hurricane, it’s not really a tool for intervention,” said Stephen Innes, Singapore-based head of trading for Asia Pacific at Oanda Corp.
“While the U.S. oil inventory data counts, the fact that the markets could still be underestimating the supply crunch from Iran sanctions has many oil investors running with the bulls.”
West Texas Intermediate crude for November delivery rose as much as 98 cents to $72.55 a barrel on the New York Mercantile Exchange and traded at $72.43 at 9:25 a.m. in Singapore. The contract settled 71 cents lower at $71.57 on Wednesday. Total volume traded was 2 percent below the 100-day average.
Brent for November settlement gained as much as 91 cents to $82.25 a barrel on the London-based ICE Futures Europe exchange before trading at $82.21. The global benchmark crude traded at a $9.71 premium to WTI. - Bloomberg
Futures in New York climbed as much as 1.4 percent. Prices on Wednesday pared declines after U.S. Energy Secretary Rick Perry said releasing oil from the Strategic Petroleum Reserve would have “a fairly minor and short-term impact” and that other producers can offset supply losses from Iran.
Meanwhile, government data showed nationwide crude inventories in America rose for the first time in six weeks.
The U.S. benchmark is nearing four-year highs after the Organization of Petroleum Exporting Countries signaled they are in no rush to boost output to counter supply losses in Iran and elsewhere, drawing repeated criticism from President Donald Trump.
The outlook for tightening supplies prompted top trading houses to predict the return of the high prices last seen in 2014, and banks including Bank of America Corp. and JPMorgan Chase & Co. lifted their forecasts.
“The U.S. using the strategic reserves as an emergency response tool to control oil prices was a bit of a stretch, given the history of how it was released in the past for war or hurricane, it’s not really a tool for intervention,” said Stephen Innes, Singapore-based head of trading for Asia Pacific at Oanda Corp.
“While the U.S. oil inventory data counts, the fact that the markets could still be underestimating the supply crunch from Iran sanctions has many oil investors running with the bulls.”
West Texas Intermediate crude for November delivery rose as much as 98 cents to $72.55 a barrel on the New York Mercantile Exchange and traded at $72.43 at 9:25 a.m. in Singapore. The contract settled 71 cents lower at $71.57 on Wednesday. Total volume traded was 2 percent below the 100-day average.
Brent for November settlement gained as much as 91 cents to $82.25 a barrel on the London-based ICE Futures Europe exchange before trading at $82.21. The global benchmark crude traded at a $9.71 premium to WTI. - Bloomberg
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