:: Market News --- ID :: 17624
crude today // 06-08-2020
Surprise move, break out may push further

By Srinivas Chowdary Sunkara // petrobazaar // 6th August 2020.

Brent oil prices for Oct delivery jumped 74 cents or 1.67% to $45.17 a barrel on London based ICE futures Europe exchange and U.S benchmark crude, WTI oil futures to be delivered in Sep rose 49 cents or 1.18% to close at $42.19 a barrel on NYMEX last night. In Shanghai, Crude oil main contract futures dropped by 2.3 Yuan or 0.81% to 280 Yuan/barrel while MCX current month crude oil futures settled Rs.12 up at Rs.3163 a barrel yesterday. Brent premium over WTI widened to $2.98 during the session.

The world crude oil price indexes moved up yesterday on a report of U.S crude inventory draw. On the fundamentals side, Analysts suggested that prices could have already priced in the draws, The move suggested otherwise, If so it was a surprise to the market. Weak dollar, positive manufacturing activity from U.S, Europe and Asia also continued to support oil complex. Surge in virus cases keep lid on oil prices due to uncertainty over demand outlook. 

Turning to weekly data, EIA reported larger than expected draw in U.S stocks, Trouncing the analysts expectation. The U.S energy dept reported a draw of 7.4 Mb in U.S crude stocks while gasoline and distillates stocks were marginally built up by 0.4 Mb and 1.6 Mb respectively during the last week. Increase in U.S crude oil refinery inputs by 42Kbpd from previous week coupled with a combination of higher imports and lower exports with 0.1 pct up in refinery utilization kept the current crude draw in place. U.S crude production stood at 11Mbpd, 100Kbpd down. This could altogether provide market ammunition to be bullish. 

Today morning, Oil indexes demonstrated slight downward correction during the Asian hours at the time of reporting. I hope bulls rally will continue today and probably bulls will sit in a ranch some time later. 

Good day to all.

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