Brent crosses $100/bbl amid concerns over supply
PremiumCrude oil inventories in the US fell by 3.3 million barrels last week against an expected decline of 2.4 million barrels
New Delhi: Crude oil prices rose on Thursday, with Brent futures crossing the $100 per barrel mark, due to supply concerns amid potential for Organization of the Petroleum Exporting Countries (OPEC) and its allies to cut output.
Oil prices also jumped amid disruptions to Russian exports and the partial shutdown of a US refinery, reports said.
Around 11.40 am, the October contract of Brent on the Intercontinental Exchange was $101.79 a barrel, higher by 0.56% from its previous close. The October contract of West Texas Intermediate (WTI) on the NYMEX rose 0.41% to $95.28 a barrel.
“NYMEX crude trades modestly higher near $95.5/bbl supported by weekly inventory report which noted a bigger than expected decline in US crude oil stocks while crude and product exports jumped to all-time high,“ said Ravindra Rao, head of commodity research at Kotak Securities:
“Also supporting crude price is expectations of fuel switching amid rising gas prices in global market and Saudi’s willingness to consider production cuts to keep market well balanced. Crude oil has witnessed a sharp recovery from recent lows and the momentum looks positive; however with growth worries and shaky risk sentiment, a sharp upside is difficult," he said.
Rahul Kalantri, vice president for commodities at Mehta Equities noted that crude oil extended its gains after the US said that it will not consider additional concessions for Iran in its response to a draft agreement that would restore Tehran’s nuclear deal, and potentially the OPEC member’s crude exports.
Iran said it had received a response from the US to the European Union’s ‘final’ text for revival of Tehran’s 2015 nuclear deal.
“Delay in the US-Iran nuclear deals supported crude oil prices. Crude oil also gained after the Saudi oil minister talked about output cuts and decline in the US oil inventories," Kalantri said.
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As per the US EIA, crude oil inventories in the country declined by 3.3 million barrels last week against an expected decline of 2.4 million barrels, he said, adding: “We expect crude oil prices to remain volatile in today’s session."
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