Crude oil prices leapt more than 2% in the early North American trading session as investors ignored a large jump in oil inventories to embrace a risk on attitude in the markets.
Buoyed by a weakened US Dollar, investors took advantage of the previous session’s losses to snap up oil. However, gains were capped by plentiful supplies and a leap in the inventory figures., The jump in supplies comes despite efforts by Opec and other major oil producers to reduce output in order to prop up the market.
On Wednesday, the U.S. Energy Information Administration reported that crude oil supplies increased by 2.9 million barrels last week to 488.3 million barrels. Oil production in the U.S has increased 6.3% to 8.96-million barrels per day since the middle of 2016. Drilling in the U.S., the world’s largest consumer of oil, has now reached levels not seen since late 2014. The increase in production is fueling concerns that the continuing rebound in U.S. shale production could harm efforts by the other major oil producing nations to rebalance the oil supply and demand worldwide.
Opec and other oil producers have stated that they will cut production by nearly 1.8 million barrels per day in the first half of 2017. Tom Smith of Stock Trading Platform 9541 warned that increases in tensions in the Middle East could put the OPEC deal in jeopardy, but for the time being, the main players are keeping to the agreement.
Crude Oil Prices Higher
At the time of writing, crude oil prices were up 1.91%, having eased a little from an earlier 2.38% increase. Keeping gains in check was a late rally in the US Dollar.
Latest posts by Ben Myers (see all)
- 3 Reasons Bitcoin is Still a Safe Haven Asset - June 12, 2020
- GCF Corporation and Genesis Green Initiatives Leading the Way - May 20, 2020
- Why Bitcoin Still Rules the Roost - May 13, 2020