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Positive Fundamentals Lead to Daily & Weekly Gains for Crude Oil

January 18, 2019 at 21:25 by Vladimir Vyun

Prices for crude oil rallied strongly on Friday due to a range of positive fundamental factors. The commodity was also heading to weekly gains.

One of such factors was the rumor that the United States are considering lifting additional tariffs on Chinese imports. While US officials denied such plans, markets remained in the risk-on mode. Together with China’s plans to stimulate growth, chances for an end to the Sino-US trade war promise stable demand from the world’s second biggest economy and a major consumer of oil.

Adding to the bullish momentum of crude was yesterday’s report that showed a decrease of OPEC oil production by 751,000 barrels per day to 31.6 million bpd in December. Saudi Arabia cut its output by 468,000 bpd to just over 10.5 million bpd, more than was expected. Today, the Organization of Petroleum Exporting Countries released a list detailing by how much each members of the organization as well as other participants of the production cut deal is going to reduce its output.

Baker Hughes released its weekly US oil rig count, showing that drillers cut the number of rigs by 21 this week. It was the biggest decline in three years.

Contract for delivery of WTI crude oil in February jumped as much as 3.34% to $53.81 per barrel as of 21:07 GMT on NYMEX today. March futures for Brent crude advanced 2.45% to $62.68 per barrel on ICE.

If you have any questions and comments on commodities today, use the form below to reply.

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