Oil extend gain as crude oil stocks rise

Oil extend gain as crude oil stocks rise

As at Wednesday, March 9, 2016, the price of oil per barrel gained in the market and the US crude stockpiles rose according to anticipation and a massive drop in gasoline inventories according to the US government data. Over the last week, crude oil stocks have risen by 3.9 million barrels totaling to 521.9 million barrels. The gasoline stockpiles, on the other hand, dropped by 4.5 million barrels while the distillate fuel reduced by 1.1 million barrels over the same period.

The production figures have barely changed with the US crude figures gaining by 50 cents after the release was up by $1.25 at $37.75 as at 1536GMT, Bent crude oil rose by $1.28 at $40.93 a barrel touching the Tuesday’s closing of $41 per barrel. The Bent crude rose above the $40 mark because there was anticipation that the top producers would cap on production.

Producers in OPEC countries and those outside the cartel will meet in Moscow on March 20, 2016, to discuss further the output freeze according to the Iraqi Oil state newspaper. However, Russia a non-OPEC producer has said although the meeting is on there is no date or venue set for it.

The worry was that too much of oil will be supplied Tuesday, March 8, 2016, which caused the global benchmark fall for the bent crude by 3%, snapping a whole week rally of hitting 2016 highs of above $40 per barrel. The crude oil stock market is going to be versatile because the Oil producers of Qatar, Saudi Arabia, Venezuela and Russia reported they would supply in the January levels if the market got enough support from the other producers in OPEC and Non OPEC according to their Mid February statement.

Stock market experts anticipate that the annual average crude oil price for 2016 should be lower than that of 2015, but it will recover by 2017, showing high stock levels and massive oversupply in the period of first half of 2016.

Categories: News
Tags: crude oil, forex

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