US oil surges 16% as inventories reportedly rise less than expected

Must Read

Tankers lifting Liza Crude required to comply with Guyana’s pandemic measures

New oil producer Guyana continues to take precautionary measures at offshore installations in response to the global...

Saipem Guyana operations supported by 80 percent local workforce – Managing Director

Since starting operations in Guyana in May 2018, Italian multinational oilfield services company Saipem has established a...

E&P companies took up combined debt of $72 billion in Q2 2020 – EIA analysis

The United States Energy Information Administration (EIA) said its latest analysis has found that debt levels among...
OilNOW
OilNow is an online-based Information and Resource Centre which serves to complement the work of all stakeholders in the oil and gas sector in Guyana.

West Texas Intermediate (WTI) for June delivery surged 17.10%, or $2.11, to $14.45 per barrel, while international benchmark Brent crude traded 4.8% higher at $21.49, CNBC reported on Wednesday.

The surge higher came after data from the American Petroleum Institute showed Tuesday that U.S. crude inventories jumped by 10 million barrels in the week to April 24 — to 510 million barrels, according to Reuters. That was lower than analysts’ expectations of a build of 10.6 million barrels, Reuters reported.

Official data from the U.S. Energy Information Administration will be released at 10:30 a.m. ET.

“Oil prices rose on Wednesday morning as traders cling to potentially positive indications that the demand-supply gap may somewhat become smaller soon,” Rystad Energy’s global head of oil markets Bjornar Tonhaugen told CNBC.

“Overall, we need official announcements for cuts or economies reopening for prices to stabilize. Expect a lot of volatility and price swings either way in coming days as bullish and bearish traders weigh their hopes and fears in a market that is desperate to find something to hang on,” he added.

Oil prices swayed wildly on Tuesday between gains and losses as investors continue to keep an eye on depleting crude storage space amid a dearth in demand. The coronavirus pandemic, which has forced countries around the world to shut their economies temporarily as people are told to stay home, has reduced global demand for crude by as much as a third, according to some estimates.

WTI for June delivery fell 44 cents, or 3.4%, to settle at $12.34 per barrel on Tuesday. International benchmark Brent crude, on the other hand, gained 47 cents, or 2.35%, to settle at $20.46.

In a note dated April 28, Moody’s Investors Service said it was reducing its near-term oil price assumptions for WTI as well as Brent.

“Exceptionally weak short-term prices will persist until production drops enough to ease the strain on storage facilities already operating at or close to full capacity,” said Elena Nadtotchi, vice president and senior credit officer at Moody’s. “Significant supply adjustments in due course should help to balance the market later in 2020, but the pace of the market’s rebalancing and rising oil prices will depend on demand recovery.”

Moody’s price prediction for WTI is currently $30 per barrel this year, and $40 next year. For Brent, it sees prices averaging $35 per barrel in 2020 and $45 in 2021.

— CNBC’s Sam Meredith contributed to this report.

- Advertisement -

Latest News

Tankers lifting Liza Crude required to comply with Guyana’s pandemic measures

New oil producer Guyana continues to take precautionary measures at offshore installations in response to the global...

Be patient: Oil does not disappear – Strengthen institutions for Guyana’s growth

The privatisation in an economy can set in motion a vicious circle. Even without corruption, rapid privatisation means that governments receive less...

Saipem Guyana operations supported by 80 percent local workforce – Managing Director

Since starting operations in Guyana in May 2018, Italian multinational oilfield services company Saipem has established a country office with 80 percent...

E&P companies took up combined debt of $72 billion in Q2 2020 – EIA analysis

The United States Energy Information Administration (EIA) said its latest analysis has found that debt levels among Exploration and Production (E&P) companies...

Costly effects of pandemic make Paris Agreement 2050 targets unlikely – Wood Mackenzie

In light of the fact that nearly US$20 trillion or 25% of global Gross Domestic Product (GDP), is earmarked for responding to...

More Articles Like This