Crude Hits $50 on Hopes U.S. Inventories Will Shrink

Date: 22 June 2016 - 19:53

News ID: ۲۸۰۹۲

New York (MarketWatch)  - Oil prices rose on Wednesday on expectations of a decline in U.S. crude stockpiles.
Brent crude , the global oil benchmark, rose 0.9% to $51.07 a barrel on London’s ICE Futures exchange. On the New York Mercantile Exchange, West Texas Intermediate futures  were trading up 1.1% at $50.40 a barrel.
U.S. crude likely fell 5.2 million barrels in the week ended June 17, according to data provided by the American Petroleum Institute. The group expects a 1.5-million-barrel decrease in gasoline stocks and a 1.7-million-barrel drawdown in distillates inventories.
The U.S. Energy Information Administration will release its closely watched inventory data later on Wednesday. The American Petroleum Institute, an industry group, said late Tuesday that U.S. crude stockpiles fell 5.2 million barrels last week. A survey of analysts by The Wall Street Journal expects a 1.6-million-barrel decrease.
"The API data supports oil prices and increases volatility ahead of this afternoon’s official” data, said Michael Poulsen, oil analyst at Global Risk Management.
Analysts at Barclays said that while oil markets have recently been supported by a spate of production outages around the globe and strong demand out of China, "oil isn’t out of the woods yet” due to fragile global growth and high inventory levels.
Large oil stockpiles have been a stumbling block for oil prices. The gradual resumption of Canada’s oil-sand production after wildfires and rising output by Iran and Iraq all point to a growth in the global glut of crude.
In the near term, oil investors are keeping a close eye on the upcoming U.K. "Brexit” referendum that will decide on membership in the European Union.