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Crude prices rally despite mixed U.S. inventory data

Published 10/14/2016, 06:17 AM
© Reuters.  Crude oil moves higher but OPEC deal uncertainty weigh
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Investing.com - U.S. oil futures rallied on Friday, despite news of a rise in U.S. stockpiles, as a decline in distillates and gasoline inventories helped.

U.S. crude futures for November delivery were up 1.15% at $51.01 a barrel, not far from Monday’s four-month high of $51.60 a barrel.

On the ICE Futures Exchange in London, the December Brent contract gained 0.73% to $52.42 a barrel, within close distance of Monday’s one-year peak of $53.73.

The U.S. Energy Information Administration said on Thursday that U.S. crude stocks rose for the first time in six weeks, increasing by 4.9 million barrels in the week to October 7 to 474 million barrels.

However, the report also showed a drop of 3.7 million barrels for distillates, which include diesel and heating oil, and a 1.9-million barrel decline for gasoline.

Meanwhile, market analysts remained skeptical of the recent OPEC deal, pondering how such a plan would be implemented.

The Organization of the Petroleum Exporting Countries reached an agreement to limit production to a range of 32.5 million to 33.0 million barrels per day in talks held on the sidelines of an energy conference in Algeria late last month.

Separately, OPEC reported on Wednesday that its oil production rose in September to its highest level in eight years and pointed to a larger surplus next year.

Crude prices could also remain under pressure due to the stronger U.S. dollar, which was boosted after the minutes of the Federal Reserve’s September policy meeting released on Wednesday showed several voting members of the policy committee judged a rate hike would be warranted "relatively soon" if the U.S. economy continued to strengthen.

Oil prices typically weaken when the U.S. currency strengthens as the dollar-priced commodity becomes more expensive for holders of other currencies.

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