Oil futures rose more than 3 percent, supported by on US petroleum inventories report. Higher prices also contributed to the weakening of the dollar.
US Department of Energy announced that in the week 1 April-26 March crude oil inventories fell by 4.9 million barrels to 529.9 million barrels. Analysts had expected inventories to increase by 3.5 mln. Barrels. Oil reserves in Cushing terminal rose 357,000 barrels to 66.3 million barrels. Meanwhile, gasoline stocks rose by 1.4 million barrels to 244 million barrels. Analysts had expected a decrease of 1.5 million barrels. Distillate stocks rose by 1.8 million barrels to 163 million barrels. Analysts had forecast a drop to 900,000 barrels. The utilization of refining capacity rose by 1% to 91.4%. Analysts had expected a decline of 0.1%. US domestic oil production fell to 9.008 million barrels per day, against 9.022 million. barrels the previous week. We remind investors are closely watching the mark of 9.0 million. Barrels. Recent data may mean that next week’s production will fall below this level, it will be a positive factor for the market. It should be emphasized, the report from the US Department of Energy has confirmed yesterday’s data from the American Petroleum Institute, which showed that during the week April 26 March-1 oil inventories fell by 4.3 mln. Barrels. Analysts had forecast an increase of stocks at 3.2 million. Barrels.
Positive impact on prices also have hopes of reaching an agreement between major oil producers to freeze production. Yesterday, the official representative of Kuwait at OPEC Nawal al-Fuzaya said that oil-producing countries following the meeting in Doha may freeze oil production at the level of February. According to her, the oil producers may agree to freeze without the participation of Iran in the negotiations. “Oil futures gained some momentum after a comment representative of Kuwait, – analysts said ANZ bank -. However, investors will be cautious in the run-up to the meeting on April 17”.
In focus were also data on business activity in the sector of services in China, which surpassed expectations. As it became known, the PMI index of Caixin / Markit in March rose to 52.2 from 51.2 in February. The growth index indicates a recovery of activity outside the manufacturing sector in China. China’s official non-manufacturing PMI also showed accelerated growth activity in May. The company said that new orders in March rose moderately, and that service companies cautious approach to personnel matters, despite a slight increase in activity. However, the employment indicator fell below the neutral level of 50 for the first time since August of 2013.
WTI for delivery in May rose to $37.57 a barrel. Brent for May rose to $39.63 a barrel.
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