Crude oil is increasing the gains seen on Tuesday after data from the American Petroleum Institute showed yesterday that crude stocks fell by 1.6 million barrels last week, and overall distillates inventories fell by 1.5 million barrels as cold weather boosted demand.
This added to speculation that the Energy Information Administration report later today might show distillates, including heating oil and diesel, probably fell by 2.5 million barrels to 113.7 million last week due to the frigid winter in the world’s biggest oil consumer.
If the EIA report today will confirm that US inventories have dropped last week, we could see crude extending its gains, especially after the US government has for the first time in years authorized limited re-exports of foreign crude to Europe.
This decision raised hopes that “such shipments may ease the supply glut caused by the sharp rise in shale oil output” as exports to Europe may increase, however some investors are still cautious since this approval does not signal a policy change.
But gains may be somehow limited as exports from Libya`s El Sharara oilfield have resumed while the North Sea Buzzard oilfield has restarted production, while the ADP employment report from the US may show the private sector added less jobs in January.
- WTI crude oil futures for March is trading around $ 97.71 a barrel after rising $0.52
- Brent futures for March settlement is trading around $ 106.06 a barrel after rising $0.28
- Natural gas is trading at $ 5.36 per cubic feet after falling 0.43%
- Gasoline is trading at $ 2.6172 per cubic feet after rising 0.54%
- Heating oil (diesel) is trading at $ 2.9949 a gallon after rising 0.40%