Home News Commodities Crude oil prices rose for the fourth consecutive day

Crude oil prices rose for the fourth consecutive day

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Crude oil prices rose for the fourth consecutive day on Wednesday, backed by OPEC+ quota deal and the US sanctions against Iran and Venezuela, which overshadowed the growth of the US inventories.

The futures on US crude oil WTI with delivery in May rose by 0.42% to 62.84 USD per barrel. Earlier, the variety reached 62.90 USD, which is the highest value since November 7, 2018.

The Brent oil recorded a price increase of 0.61% to 69.79 USD per barrel, approaching the key threshold of 70 USD per barrel.

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Production cuts by the Organization of Petroleum Exporting Countries (OPEC) helped to reduce the cartel’s supply to a four-year low in March. Russia’s production, which also participates in the OPEC+ quota deal, has fallen to 11.3 million barrels per day. However, restrictions on the Russian side have not reached the levels set in the agreement.

Three of the eight countries that Washington had excluded from the Iranian sanctions and were allowed to continue importing oil from the Middle East country have reduced imports to zero. This was stated by an official US official on Tuesday, adding that improved conditions on the world’s oil market would help to further reduce Iranian oil exports.

The US Vice President Mike Pence said on Tuesday that the US would continue to put pressure on the Venezuelan oil industry and those who supported will be sanctioned. He also explained that oil prices currently allow for such measures.

Venezuelan state energy company PDVSA has kept oil exports to nearly 1 million barrels per day in March, although the US sanctions and power interruptions have had a negative effect on the country’s main export terminal.

US crude oil inventories

The US crude oil inventories rose by 3 million barrels last week, according to the data of the American Petroleum Institute (API). The data is coming in over analyst expectations of a ­425,000-barrel draw.

The API also reported a 2.6 million barrel fall in gasoline stocks and distillate inventories decreased by 1.9 million barrels, compared to an expected a draw of 506,000 barrels for the week.

Crude oil inventories at the Cushing, Oklahoma facility grew by 18,000 barrels for the week.

The Energy Information Administration will release its more closely watched inventory data later today. The analysts expect the EIA data to show crude inventories dropped by 100,000 barrels.

The US crude oil production as estimated by the Energy Information Administration showed that production for the week ending March 22—the latest information available—stayed flat at an average of 12.1 million barrels per day, which is the all-time high for the United States.

Hedge funds expand their bullish bets on oil prices

Hedge funds and other asset managers expanded their bullish bets on oil prices last week amid signs that US shale growth is slowing. The global oil market is further tightening and oil demand could be resilient in the coming months.

Hedge funds increased their combined net long position in the six most important oil contracts by 37 million barrels in the week to March.

The net long increased thanks to the opening of 33 million barrels of bullish positions and a drop by 4 million barrels in the short positions.

In the two most important oil contracts, money managers boosted their net long position in WTI by 29 million barrels and increased the net long position in Brent by 13 million barrels in the week ending March 26.

Hedge funds, therefore, continued their bullish positioning in the most recent reporting week after they had returned buying oil in the week prior, following a hesitant pause earlier in March.

Fund managers have several reasons to be more bullish on oil prices than they were at the beginning of last month.