Oil Up on Surprise Drop in U.S. Stocks By Investing.com

© Reuters

By Gina Lee

Investing.com – Oil was up on Wednesday morning in Asia as American Petroleum Institute (API) showed an unexpected drop in U.S. crude and fuel stocks, countering worries over a possible spike in supplies from Iran.

edged up 0.17% to $90.93 by 10:00 PM ET (3:00 AM GMT) while edged up 0.13% to $89.48.

Investors now await U.S. crude oil supply data from the U.S. Energy Information Administration, due later in the day.

“Undersupply is the key factor that has pumped up the oil price,” said Tina Teng, an analyst at CMC Markets.

Tuesday’s U.S. crude oil supply data from the API showed a drop of 2 million barrels in inventories, against analyst expectations of a 400,000-barrel increase.

More data from the U.S. Energy Information Administration (EIA) will be available at 10:30 a.m. EST (3:00 AM GMT).

But concerns about a possible that could unleash more oil into global markets still weighed heavy on the market.

Brent and WTI slid about 2% on Tuesday for a second straight session, as Washington resumed indirect talks with Iran to revive a nuclear deal. An agreement could drop U.S. sanctions on Iranian oil and rapidly add supplies to the market, even as a few vital issues remains in need of sorting.

“With the negotiations ongoing, the oil price is likely to lose steam in the next week, despite the bump higher we’ve seen today,” Teng said, adding that there has also been some profit taking among investors who are now cautious as prices hit more than 7-year highs recently.

Oil prices close to $100 a barrel could also draw more production from the U.S. The EIA expects U.S. crude output to rise 770,000 barrels per day to 11.97 million bpd this year.

Concerns over Ukraine were on hold. French President Emmanuel Macron has indicated that steps can be taken to de-escalate the crisis after meeting with Russian President Vladimir Putin and urged all sides to stay calm.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.


Leave a Reply

Your email address will not be published.

GIPHY App Key not set. Please check settings