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Oil Prices Break Week-long Fall Amid Gasoline Drawdown

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Published on : Oct 16, 2015

Crude oil rates increased on Friday to break out of a week-long fall. Investors had begun to speculate that the dropping production rates in the U.S. would cut down the global surplus while the nation’s distillate and gasoline inventories fell more than previously estimated.

On the other hand, analysts warned against the price recovery, stating that it might not last too long. This speculation comes from a likely resource surplus generation from Iran. Brent, the worldwide benchmark, has slipped 4.5% till now in this week. It has fallen by more than a quarter since May.

The new front-month December for Brent will see a 33 cents increase for LCOc1, which amounts to 0.7%. The resulting US$50.06 per barrel was recorded by 0456 GMT after landing at US$49.73 per barrel with a 4 cent fall. Brent in November closed down 44 cents at US$48.71 on Thursday before expiring.

CLc1, the crude in the U.S.’s front-month November contract, increased by 41 cents, which is 0.9% to sum up to US$46.79 per barrel. It then steadied down by 26 cents at US$46.38 per barrel, with a 0.6% fall.

A researcher from Philip Futures, Singapore, said that the market is closing in on the reducing productions in U.S. crude, which has now resumed its downtrend. The researcher, Daniel Ang, also said that although crude prices are going up now, there could be the Iranian crude returning to the market, which could push it down again. He said that there is a likely possibility of witnessing a downward trend for the remainder of this year.