By Srinivas Chowdary Sunkara // petrobazaar// 11-4-18.
Crude prices spiked to record high levels
Yesterday, Both the crude oil futures rose sharply to continue previous session gains. On Tuesday, Brent futures advanced by 3.48% to touch $71.34 per barrel, a highest level since late 2014.
Conciliatory tone of China's President Xi Jinping and positive note from Trump administration over prolonged trade spat between U.S and China gave comfort to the market to focus on Geo-politics. Weak dollar supported oil prices. Geo-political risk premium is increasing heavily due to escalation of tensions in the middle east after Europe's air traffic control agency warned of possible air strikes on Syria in the next 72 hours. API reported on Tuesday that U.S crude supplies rose by roughly 1.8 Mb for the week ended April, 6th. Analysts expect that EIA to report a rise of 100,000 barrels in crude supplies on Wednesday.
Crude oil price update
Yesterday, U.S crude grade futures for May delivery increased by $2.09 per barrel or 3.3% to close at $65.51 a barrel on Nymex where as Brent futures to be delivered in June spiked by $2.39 with 3.48% surge to close up at $71.04 per barrel on London based ICE futures Europe exchange. Today Asian markets are opened in red and trading with a loss of below 0.5% at the time of reporting.
In my view, Increasing geo-political risk premium, weak dollar and Strong demand are supporting oil prices. I have been noticed that crude is going along side of equity markets. Surge in equity markets after easing of trade war tensions also keep the ground for oil prices. U.S stock build is the cause of concern for today's market.
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