TEHRAN: Crude oil (WTI) closed around 68.22 in US session on Wednesday, jumped by almost 0.32% on the concern of Iran sanction by Trump despite an unexpected rise in US crude oil inventories.
As par EIA data on Wednesday, US crude oil inventories soared on last week to 2.170M from -1.071M against an estimate of -1.600M and an earlier API figure of 1.099M. US gasoline inventories also surged surprisingly higher to 0.840M from prior -2.968M against an estimate of -0.652M. The US crushing crude oil inventories also jumped to 0.459M from -1.115M, while weekly distilleries stocks came lower at -2.611M from -3.107M against an estimate of -0.861M.
Initially, oil tumbled on the inventory report and made a knee-jerk low of 67.11, but soon it recovered on geopolitical tensions from Iran nuclear deal narrative by Trump and made a high of 68.31.
On Tuesday, oil tumbled by 1.37% on the sharp decline in US stock market which may affect consumer confidence in the economic outlook and energy demand. Crude oil prices were also undercut by French President Macron’s proposal for a new nuclear deal with Iran, which would keep Iran crude exports intact. But oil prices were also supported by a weaker dollar index, whereas near normalization of Libyan output at Waha oil field has also dragged a bit. Previously, there was a report of Libyan disruption on the weekend.
As a reminder, on Tuesday Trump termed the Iran deal as “insane” and warns Iran will have bigger problems if it restarts nuclear program. Trump said, he had substantial talks on Iran with Macron and they’re looking forward to doing something that has to be done strongly. He and Macron could have an agreement soon on Iran.
But oil jumped after Trump said “Iran will pay a price like few countries have ever paid if they threaten the US in any way”, but soon reversed and finished the day lower by comments from Macron suggesting that he wants to negotiate a new accord with Iran to curb its development of missiles.
On Monday, oil surged by 0.57% on renewed Middle East tensions after Houthi rebels in Yemen launched missiles against Saudi Arabia. But initially, oil was under stress as Baker Hughes reported an increased rig count to 820 on Friday, which is now at its highest level since March 2015 as shale boom continues.
