Oil prices rose slightly on the European markets on Wednesday, resuming its gains which have halted yesterday by profit-taking and correction processes, prices are holding up around the highest level over two and a half year, based on the KSA domestic and foreign policy tensions, in addition to the decline of crude oil inventories in the USA; the world’s largest oil consumer in the world. The prices are negatively influenced by concerns about the Chinese demand after a large drop in imports of oil during the last month.
By 09:24 GMT, US crude rose to $ 57.10 a barrel from the opening level of $ 56.95, recording a high of $ 57.12 and a low of $ 56.79.
Brent crude rose to $ 63.75 per barrel from the opening level of $ 63.54, recording a high of $ 63.78 and a low of $ 63.27.
US crude oil lost 0.5% in yesterday’s adjustment, being the first four-day loss, due to correction and profit taking processes after hitting a two-and-a-half-year high of $ 57.67 a barrel at earlier time. Brent fell 0.8% as it recorded $ 64.63 per barrel, as a high since 2 July 2015.
Oil prices rose about 20% since the beginning of September, driven by the strong global demand growth and supported by strong prospects that the Organization of Petroleum Exporting Countries (OPEC) would extend the global production cut-off agreement until the end of 2018 at its official meeting in Vienna on current November 30th.
Oil markets currently focus on the domestic and foreign policy tensions in the Kingdom of Saudi Arabia, the world’s largest oil exporter, especially as Crown Prince Mohammed bin Suleiman continues to tighten his grip on power through a wide crackdown on corruption and escalating hostile statements between Riyadh and Tehran over the right-wing dispute.
In the United States, the Petroleum Institute announced yesterday that crude inventories in the country fell by 1.56 million barrels for the week ended on 3rd the November, in the second consecutive weekly decline.
According to the data, total inventories reached 482.8 million barrels, being the lowest level since the week ended on 8th of January 2016, in a strong sign of demand levels in the world’s largest oil consumer.
Traders are awaiting the official US inventory data that would be released later today, by the U.S. Energy Information Administration (EIA), with expectations of a 2.5 million barrel decline.
In China, according to the General Administration of Customs data on Wednesday, oil imports fell to 7.3 million barrels per day in the last October, being the lowest in almost a year. Imports recorded a high record level in September, above 9 million barrels per day.
Shale Oil production in the United States will rise to 7.5 million barrels per day in 2021, which is higher by 56 percent than the OPEC’s expectations one year ago, OPEC said in its latest monthly oil market report released on Tuesday.