By Srinivas Chowdary Sunkara // Petrobazaar // 24-10-17.
Crude Oil prices rose above 1 percent in volatile trading on Tuesday. Prices are maintaining upward momentum after Saudi Arabia, A top exporter in OPEC cartel said that focus remained on reducing the oil stocks in Industrialised nations to their five year average and raised the prospect of extending the pact beyond March, 2018. There are reports that crude flows through Iraq's northern pipeline to Ceyhan in Turkey rose further to 300,000 bpd on Tuesday, still below 600,000 bpd which is helping to support prices. U.S stocks are expected to fall further during the last week as per the preliminary reports.
WTI, Brent prices today
U.S crude oil grade, West Texas Intermediate (WTI) futures for December delivery rose around 1 % to $52.39 with 49 cents rising after touching a day's high of $52.55 a barrel on Nymex. The International crude grade, Brent futures to be delivered in December, went up by 66 cents or 1.15% to $58.03 per barrel after touching a day's high of $58.24 per barrel on London based ICE Futures Europe exchange . Brent is trading at a premium of $5.85 per barrel to WTI at 21:27 IST.
Production cuts working?
U.S stocks have dropped from 536mb to 456mb and are expected to draw further for continuous 5th week. There was an increase in U.S exports from 1.5 mbd last year to 700,000 barrels during the current year. Stocks are drawn from SPR and commercial reserves. OPEC is reporting that stocks in OECD countries are coming down to near 5 year average. On the other hand global oil demand growth is going to be very strong along with the strong macro economics. Apart from Asia, Europe is fueling the demand growth surprisingly. OPEC has a plan of exit after stocks reach five year average and want to maintain balanced supply and demand to ensure not to return to higher inventories in future for better equilibrium price.