Oil futures rose on Thursday, buoyed after the International Energy Agency underscored growing demand for power generators amid soaring prices for natural gas and coal.
However, prices cut some of their gains after US government data revealed a third consecutive weekly rise in domestic crude inventories, the largest since March.
The Energy Information Administration reported Thursday that US Crude Inventories Increased at 6.1 million barrels for the week ending October 8. That was the third consecutive weekly supply hike and the biggest weekly rise since March, according to EIA data.
The rise defied expectations of an average 500,000 barrel drop expected by analysts surveyed by S&P Global Platts. The American Petroleum Institute reported Wednesday night a 5.2 million barrels climb over the past week. The EIA and API reports were released one day later than usual this week due to the Columbus Day holiday on Monday.
Crude oil saw much larger-than-expected supply buildup, and large extraction from the Cushing, Oklahoma, storage facility, Tariq Zahir, managing member of Tyche Capital Advisors, told MarketWatch. EIA data also showed crude stocks at Cushing fell 1.9 million barrels last week.
The numbers from the US consumer price index. stronger than expected on Wednesday and “it seems that the inflation concerns that are transitory are very much in doubt,” he said. “Inflation would help crude to stay strong. However, as we are nearing the end of the hurricane season and the driving season is winding down, we would not be surprised to see crude oil return some of the gains that we have seen in recent weeks. ”
West Texas Intermediate Crude for November Delivery
it rose 58 cents, or 0.7%, to $ 81.02 a barrel on the New York Mercantile Exchange. Prices were trading at $ 81.23 shortly before the EIA supply data.
December Crude Brent
the global benchmark index rose 59 cents, or 0.7%, to $ 83.77 a barrel on ICE Futures Europe, below an intraday high of $ 84.50.
The EIA also reported a weekly inventory decline of 2 million barrels of gasoline, but said distillate supplies were “virtually unchanged” last week. Both remained below the five-year average level for this time of year. The S&P Global Platts survey had forecast supply drops of 400,000 barrels of gasoline and 800,000 barrels of distillates.
In Nymex, November gasoline
rose 0.4% to $ 2,416 a gallon, while November’s heating oil
added 0.8% to $ 2.54 a gallon.
Oil prices appeared to end Thursday at new multi-year highs, with US benchmark WTI crude on track to the highest selloff since late October 2014 and Brent crude targeting the highest close since early. October 2018.
In its closely watched monthly report, the Paris-based IEA raised its forecasts for global oil demand for this year and next at 170,000 barrels per day and 210,000 barrels per day respectively, but added that the cumulative effect of the continuing energy crisis could reach 500,000 barrels per day from September to the first quarter of next year.
The IEA noticed a “massive” switch to crude oil by power generators amid a shortage of natural gas, liquefied natural gas and coal supplies.
Meanwhile, natural gas futures extended their initial gains after the EIA reported Thursday that domestic natural gas supplies increased at 81 billion cubic feet for the week ending October 8. That was slightly less than the average increase of 89 billion cubic feet forecast by analysts surveyed by S&P Global Platts.
November natural gas
added 22.2 cents, or 4%, to $ 5,812 per million British thermal units. Prices have more than doubled so far this year and rose briefly early last week to hit a nearly 13-year high.
Prices in the US are likely not to rise as sharply again, but “it is difficult to have a high degree of confidence in that projection as we are now beyond simple forces of supply and demand and are dealing with a market that is afraid “. with supplies short for the winter season, Marc LoPresti, co-managing director of The Strategic Funds, said in recent comments to MarketWatch.
“Fear makes rationality go out the window,” he said.
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