Oil rose after a government report showed the US is exporting a record number of crude and refined products as the market waits to learn whether nuclear negotiations will clear a path for Iran to sell more oil.
West Texas Intermediate rose 1.2% to settle near $95 a barrel after fluctuating in a choppy trading session on Wednesday. Energy Information Administration data showed that US crude stockpiles fell amid record petroleum exports. Meanwhile, the US sent its response to the EU’s latest proposal to rescue the 2015 nuclear accord. National Security Council spokesman John Kirby said that while a deal is closer than ever before, “Gaps remain. We’re not there yet.”
“The Iranian nuclear deal continues to be an on again/off again-type news that continues to throw volatility into crude futures,” said Dennis Kissler, senior vice president of trading at BOK Financial.
Oil has been on the rebound this week since Saudi Arabian Energy Minister Prince Abdulaziz bin Salman said the futures market is increasingly disconnected from fundamentals and that it may impel the OPEC+ alliance to cut output. The market’s rally has spurred a more positive technical picture in the oil market, with Brent trading above its 200-day moving average. Timespreads that gauge market strength also jumped in recent days.
Russia floated the possibility of selling discounted crude to Asian buyers in response to US-led efforts to impose a price cap. India said it will seek a broader consensus before supporting any such plan, with US officials expected to advocate for it during a visit to the country this week. European sanctions are set to strengthen in December.
“Buyers of Russian crude are playing the game to get the cheapest crude without drawing the ire of the US and Europe,” said Rebecca Babin, a senior energy trader at CIBC Private Wealth Management.
- WTI for October delivery rose $1.15 to settle at $94.89 a barrel in New York.
- Brent for October settlement rose $1 to settle at $101.22 a barrel.
Meanwhile, the US gasoline crack spread, a measure of the profitability of turning crude oil into fuel, fell to its lowest level since January after government data showed the biggest weekly increase in New York-area stockpiles so far this year.
Published at Wed, 24 Aug 2022 13:11:43 -0700