Brent gains as US inventory draw outweighs easing supply disruption fears
The front-month ICE Brent contract has increased by $1.06/bbl on the day, to trade at $68.24/bbl at 09.00 GMT.
IMAGE: Getty Images
Upward pressure:
Brent crude prices have edged higher, following the release of the US Energy Information Administration’s (EIA) weekly oil inventory data.
US commercial crude oil inventories fell by 3.5 million bbls to 420.3 million bbls in the week ending 30 January, according to the EIA. Declining inventories are widely interpreted as a sign of stronger demand.
“Sentiment was also boosted by a drop in inventories,” said Daniel Hynes, senior commodity strategist at ANZ Bank.
“The US Energy Information Administration’s weekly report for the week to January 30 was bullish on balance,” added Vandana Hari, founder of VANDA Insights.
Additional support for Brent futures has come from a trade agreement between the US and India, which has raised expectations of firmer global energy demand.
Downward pressure:
Oil prices have come under modest downward pressure after the US and Iran agreed to hold talks in Oman on Friday, easing fears that a possible military confrontation could disrupt oil supplies from the strategically important Middle East, Reuters reported.
Crude futures lost momentum “after the US and Iran agreed to hold talks on Friday, following earlier indications that negotiations had been called off amid differences over the venue and agenda,” said Vandana Hari, founder of VANDA Insights.
Additional pressure has come from a stronger US dollar and heightened volatility in precious metals.
A firmer dollar typically weighs on oil prices by making dollar-denominated commodities more expensive for buyers using other currencies, which can dampen demand.
By Tuhin Roy
Please get in touch with comments or additional info to news@engine.online
