U.S. crude prices are slightly higher in Thursday’s North American session. WTI futures for October delivery are trading at $58.82, up $0.50, or 0.84% on the day.
Crude Steady After Roller-Coaster Ride
It’s been a very busy week for crude oil. Crude prices showed sharp volatility early in the week, with double-digit gains on Monday after the attack on a Saudi oil refinery. At one point this week, crude hit $63.37, its highest level since mid-April. Investors have since calmed down has retracted below the $59 mark. Is this the calm before the next storm? The U.S. and Saudi Arabia have publicly pointed a finger at Iran, which has denied any involvement in the attack. Tensions remain high and any further hostile acts could send crude sharply higher.
Crude Inventory Report Surprises
Investors keep a close eye on weekly crude U.S. inventory reports, which help gauge on the extent of oil stockpiles. The markets had expected a decline from a key crude inventory report. The estimate for the Energy Information Administration (EIA) report stood at -2.1 million barrels, but surprised with a surplus of 1.1 million. This reading comes on the heels of a report from the American Petroleum Institute (API), which project showed a surplus of 0.59 million. The surplus in crude supplies has pared the upward movement on Thursday. Still, crude has posted excellent gains of 7.0% this week.
Where is Crude Headed?
Crude oil prices shot higher early this week, punching above $63. The foray above the $60-level turned out to be short-lived, as crude retreated back below $60. Still, investors remain nervous, and renewed tensions between the Iranian regime and an unpredictable President Trump could be a recipe for higher oil prices. I would not be surprised if crude regroups over the next several weeks and moves towards the $70 level. In the coming days, I would expect crude to remain close to the $60 level, possibly pushing past this level.
This article was originally posted on FX Empire
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