(C) Reuters. Oil Steady After Two-Day Advance With U.S. Stockpiles Tightening
(Bloomberg) — Oil steadied after a two-day gain, with U.S. crude stockpiles shrinking to the lowest level since 2018 and tightening the market as it faces a global energy crunch ahead of the crucial winter demand period.
Futures in New York traded near $72 a barrel after climbing more than 2% on Wednesday. Nationwide U.S. crude inventories fell for a seventh week, although gasoline stockpiles unexpectedly rose, according to government data. Royal Dutch Shell (LON:RDSa) Plc, meanwhile, restarted a key oil pipeline in the Gulf of Mexico after Hurricane Ida hit the region over three weeks ago.
Oil has recently resumed its upward momentum, in part due to the Gulf of Mexico outages, after a period of demand uncertainty following the spread of the delta variant of the virus. Focus has now switched to how a tightening natural gas market will impact the broader energy complex over winter, with Goldman Sachs Group Inc (NYSE:GS). predicting crude could advance to $90 a barrel if conditions are colder than normal.
Oil has firmed in a bullish structure as the market has gradually tightened. Brent’s prompt timespread was 80 cents a barrel in backwardation — where near-dated contracts are more expensive than those further out — on Wednesday. That compares with 68 cents a week earlier.
(C)2021 Bloomberg L.P.
Oil Steady After Two-Day Advance With U.S. Stockpiles Tightening
Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.