Over 40 years’ heritage
185,800 clients worldwide
Over 15,000 markets

Crude rises more than 1% ahead of inventory data

Expectations of a second successive draw in US supplies has boosted the oil price today.

The price of oil has risen sharply today, with market participants speculating that tomorrow’s weekly report from the Energy Information Administration (EIA) will point to tightening fundamentals.

A survey of analysts conducted by Reuters shows a consensus estimate of a 2.7 million-barrel decrease in crude oil inventories for last week. Following on from the prior week’s 5.58 million decline, this would amount to a sizeable draw in the US stockpile.

By late in the New York trading session, crude oil futures for January had risen 1.05% to $98.42 a barrel, after earlier trading as high as $98.74, the highest the contract has reached since the end of October.

The decline in crude supplies reported last week was driven by higher capacity utilistation at refineries, which rose to their highest level since the summer driving season over the reporting period. The higher run rates are a response to the strength of demand for crude distillates and the resulting decrease in crude stocks is supportive of the crude price.

The American Petroleum Institute releases its own supply data later today. The EIA was forced to shut its government offices in Washington today on account of the winter storm system that has beset the eastern United States, but says that this will not delay the release of the petroleum status report tomorrow.

The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication.