Oil futures climbed toward the $50 level on Thursday, driven higher by a bullish outlook following weekly U.S. inventory data, but market participants expected the commodity to trade in a narrow range ahead of a OPEC meeting next week.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in September CLU7, -0.67% climbed 23 cents, or 0.5%, to $49.84 a barrel, after trading as low as $49.12 earlier in the session.
October Brent crude LCOV7, -0.29% on London’s ICE Futures exchange rose 38 cents, or 0.7%, to $52.74, bouncing back from a loss of as much as 0.9% earlier on Thursday.Oil has experienced fitful trade over the past several weeks, but has managed to drift higher within range of its 200-day moving average at $49.45 a barrel, as investors have grappled with the Organization of the Petroleum Exporting Countries’s attempts to cap global output, along with other major producers. U.S. shale producers have been the biggest headwind to OPEC’s efforts to stem output. Meanwhile, an agreement led by the cartel and major crude producers is set to expire at the end of the first quarter in 2018.
We are going to be relatively range-bound
“I think we are going to be relatively range-bound unless we see some kind of weather or political event,” said Tariq Zahir, managing member at commodity-trading advisor Tyche Capital Advisors.
Zahir said oil futures would be sensitive to any news, given its recent uptrend. He said U.S. traded oil has the potential to hit $51, if any supply disruptions or bullish news emerges.
Late Wednesday, the EIA reported a 1.5 million barrel drop in crude inventories last week, below analysts’ expectations. However, “a strong increase in demand was enough to appease the bullish investors,” said ANZ Bank. Refiners’ capacity utilization jumped to 95.4% last week, the government also said.
American Petroleum Institute out on Tuesday
“I think we are going to be relatively range-bound unless we see some kind of weather or political event,” said Tariq Zahir, managing member at commodity-trading advisor Tyche Capital Advisors.
Zahir said oil futures would be sensitive to any news, given its recent uptrend. He said U.S. traded oil has the potential to hit $51, if any supply disruptions or bullish news emerges.
Late Wednesday, the EIA reported a 1.5 million barrel drop in crude inventories last week, below analysts’ expectations. However, “a strong increase in demand was enough to appease the bullish investors,” said ANZ Bank. Refiners’ capacity utilization jumped to 95.4% last week, the government also said.
ANZ sees tightness coming in the fourth quarter
Data from the American Petroleum Institute out on Tuesday showed stockpiles unexpectedly increased last week.
The mixed signals on U.S. supply come as market players globally await signs that production caps led by OPEC and Russia are making notable dents into still-historically high global supplies. ANZ sees tightness coming in the fourth quarter, pushing oil prices into the high-$50s.
Among refined products, September gasoline RBU7, -0.79% was up 0.2% at $1.649 a gallon.
Meanwhile, natural gas for September NGU17, -0.18% climbed 0.4% to $2.821 per million British thermal units.
a few.
