Royal Dutch Shell Plc  .com Rotating Header Image

US oil closes above $40 for first time since Dec. 3

Screen Shot 2016-02-24 at 17.06.42

US oil closes above $40 for first time since Dec. 3

Screen Shot 2016-03-17 at 22.17.45

17 March 2016

Oil prices hit 2016 highs on Thursday, with U.S. crude closing over $40, on optimism that major producers will strike an output freeze deal next month amid soaring gasoline demand in the United States.

A weaker dollar after a Federal Reserve policy decision on Wednesday that indicated two U.S. rate hikes this year instead of four also drew oil buyers using currencies such as the euro.

OPEC kingpin Saudi Arabia and non-OPEC producers led by Russia will meet on April 17 in the Qatar capital Doha, increasing the likelihood of the first global supply deal in 15 years.

“The remote possibility that a coordinated supply control effort comes from this meeting, assuming it even happens, has put market bears on the defensive,” said Pete Donovan, broker with Liquidity Energy in New York.

Oil prices have surged more than 50 percent from 12-year lows since the Organization of the Petroleum Exporting Countries floated the idea of a production freeze, boosting Brent up from around $27 a barrel and U.S. crude from around $26.

On Thursday, the front-month in U.S. crude’s West Texas Intermediate (WTI) settled 4.5 percent higher, at $40.20 a barrel, posting its best close since Dec. 3,2015.

Brent crude‘s front-month rose $1.15 to $41.48, after earlier reaching the year’s peak of $41.60.

“For now, the market is staying well supported, and the dollar is providing additional support,” said Olivier Jakob, oil analyst at Petromatrix. “It will be difficult to return to the lows of the year.”

WTI also briefly traded at a premium to Brent on Thursday, the first time since January, as traders piled into the U.S. crude market on bets of an uptick in domestic oil exports.

U.S. crude has gained further traction on smaller stockpile builds of late, and surging gasoline consumption.

U.S. crude inventories last week climbed to its fifth straight week of record highs but by just 1.3 million barrels, a much smaller build than forecast, government data showed. Gasoline demand rose 6.4 percent over the past four weeks from a year ago.

SOURCE

This website and sisters royaldutchshellgroup.com, shellnazihistory.com, royaldutchshell.website, johndonovan.website, and shellnews.net, are owned by John Donovan. There is also a Wikipedia segment.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Comment Rules

  • Please show respect to the opinions of others no matter how seemingly far-fetched.
  • Abusive, foul language, and/or divisive comments may be deleted without notice.
  • Each blog member is allowed limited comments, as displayed above the comment box.
  • Comments must be limited to the number of words displayed above the comment box.
  • Please limit one comment after any comment posted per post.