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US Crude Tops $49 as EIA, IEA Reports Please Investors

September 13, 2017 at 16:59 by Andrew Moran

Oil futures are surging midweek as new industry reports found that crude production declined for the first time in four months in August. Investors are combing through new data released by the International Energy Agency (IEA) and the US Energy Information Administration (EIA) on Wednesday.

October West Texas Intermediate (WTI) crude futures jumped $0.83, or 1.72%, to $49.06 per barrel at 16:43 GMT on Wednesday on the New York Mercantile Exchange. US crude has been retreating from recent lows produced by Hurricanes Harvey and Irma.

Brent, the international benchmark for oil prices, is also rallying in the middle of the trading week. November Brent crude futures rose $0.69, or 1.27%, to $54.96 a barrel on London’s ICE Futures exchange.

According to the EIA, domestic crude supplies increased by 5.9 million barrels for the week ending September 8 and total domestic US crude output soared by 572,000 barrels per day (bpd) to 9.353 million barrels. The EIA further reported that gasoline stockpiles tumbled 8.4 million barrels for the week, while distillate stockpiles dropped by 3.2 million barrels.

The Paris-based IEA confirmed in its monthly report that the oil market is beginning to normalize amid strong demand and decreasing production levels. The agency said that international oil supplies slipped 720,000 bpd last month to 97.7 million bpd. This is because of disruptions to US output, civil unrest in Libya, and Organization of Petroleum Exporting Countries (OPEC)’s production freeze.

Report authors project that as the market starts to tighten then prices will begin to rise again.

Based on recent bets made by investors, expectations are that markets are tightening and that prices will rise, albeit very modestly.

Demand growth continues to be stronger than expected, particularly in Europe and the US.

These figures from the IEA echo that of OPEC’s supply report on Tuesday. Oil analysts note that investors should be pleasantly surprised by the IEA, EIA, and OPEC reports this week.

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

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