Oil Spot Price: WTI Rises on Drop in US Stockpiles

on Sep 18, 2013
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iNVEZZ.com (London), Wednesday, September 18: A report showing a drop in US oil stockpiles to a 17-month low today sent higher the West Texas Intermediate (WTI) crude price.

The Energy Information Administration has reported that US inventories have declined by 4.37 million barrels to 355.6 million, which is the lowest level since March 2012. A Bloomberg survey has projected a decline by 1.2 million barrels. A draw of 861,000 barrels at WTI’s delivery point at Cushing, Oklahoma, has left inventories there at 33.3 million barrels, the lowest level in almost 19 months

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“WTI is up this morning because of the fairly large draw at Cushing,” said Addison Armstrong, director of market research at Tradition Energy in Stamford, Connecticut, as quoted by Bloomberg. “…The market will tread water until the FOMC meeting ends and they announce what they will do about stimulus.”
WTI crude for October delivery rose by 0.9 percent to $106.40 a barrel as of 10:42 a.m. on the New York Mercantile Exchange, shortly after the release of the stockpiles report. Yesterday, the US benchmark oil price fell to $105.42, which was the lowest settlement price since August 22.

Brent’s premium to WTI today shrank to as little as $2.70 a barrel, which was the narrowest gap since August 19, on the back of return of some oil supplies in Libya and easing worries over a military strike against Syria that could lead to a possible disruption of oil exports from the Middle East.
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Brent oil for November settlement was up 0.3 percent at $108.51 a barrel on the London-based ICE Futures Europe exchange.
Libya, the country with the largest oil reserves in Africa, seeks to increase production to 700,000 barrels a day this week after the government yesterday lifted force majeure at two major terminals on account of “improving conditions,” the country’s state-owned National Oil Corporation said. Production has resumed at two oilfields and it will add a combined 400,000 barrels a day, the NOC’s chairman Nuri Berruien has said, Bloomberg reported. Libya’s oil output has been crippled by a series of labour disputes at oil ports, refineries and oil fields.

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