Gold Silver Reports – Crude Prices Rise on Expected fall in US Inventories – Brent oil prices rose to a three-week high on Wednesday as weekly US crude inventories are expected to have fallen steeply and geopolitical tensions around oil-rich Iraq and Iran raised risk premiums.
International benchmark Brent crude futures traded 39 cents higher at $58.27 a barrel at 1400GMT. They reached their highest level in three weeks earlier in the session at $58.54 a barrel.
US West Texas Intermediate (WTI) crude futures traded at $52.18 a barrel, up 30 cents on the day.
Weekly US crude inventories fell by 7.1 million barrels in the week to 13 October to 461.4 million barrels, the American Petroleum Institute (API) said late on Tuesday.
Official US fuel inventory data is due later on Wednesday from the government’s Energy Information Administration.
“There are market expectations for a bullish EIA inventory report this afternoon so Brent is heading towards $60 a barrel again,” said Hans van Cleef, senior energy economist at ABN Amro.
Oil market investors were also closely following developments in the Middle East, where tensions in northern Iraq were threatening to disrupt oil flows.
Crude Oil flows through the 600,000 barrel-per-day (bpd) Kurdish pipeline to the Turkish port of Ceyhan have dropped off sharply to around 225,000bpd, a shipping person in the know told Reuters.
“It remains to be seen whether the Kurds, after withdrawing from the region they claim to be entitled to, will allow crude oil to be transported by pipeline across their territory to the Turkish Mediterranean port of Ceyhan,” said analysts at Commerzbank.
Iraq’s oil minister said it had asked oil major BP to develop the Kirkuk oilfields, but the company said it was in no rush to return to the area until security improves.
The Iraq crisis adds to a looming dispute between the US and Iran. US President Donald Trump last week refused to certify Iran’s compliance over a nuclear deal, leaving Congress 60 days to decide further action against Tehran.
During the previous round of sanctions against Iran, some 1 million barrels per day of oil was cut from global markets.
More than one month ahead of OPEC’s next official meeting, people familiar with the matter have told Reuters its members were leaning towards extending an oil supply cut deal struck with Russia and other producers for a further nine months.
Three OPEC officials said keeping the curbs in place until the end of 2018 was a likely outcome, while a fourth said an extension of six to nine months would be needed to remove all excess oil in storage.
A technical pattern known as a “Golden Cross” was approaching in WTI crude oil contracts on Wednesday, in which the 50-day moving average climbs higher than the 200-day. This is widely seen as a bullish price indicator, and already occurred with Brent futures on 25 September. – Neal Bhai Reports
