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New yearly highs are the order of the day

Published Wednesday, June 8th, 2016

Supply outages in Nigeria are of great concern. They are taken so seriously that WTI closed 67 cents/bbl higher and above the $50/bbl mark for the first time since July 21. The continuous strength comes despite the Nigerian government making every effort to start a dialogue with the Niger Delta Avengers group who claim responsibility for the recent attacks on oil installations. Brent performed even better and registered yet another closing high with a daily gain of 89 cents/bbl.

Of course there have been other factors at play that helped oil prices continue their upward journey. The general strike in France is indeed one of these developments as it includes refinery workers. Latest reports suggest that the strike at the country’s five refineries will continue until at least Friday when the Euro 2016 football tournament kicks off, according to the country’s trade union, CGT.

The API released its weekly figures on US oil stocks after the close and it did nothing to change the underlying bullish sentiment. Not only crude oil inventories fell by more than expected (-3.6 million bbls versus a forecast of a 2.7 million bbls draw) stocks at Cushing also nosedived (-1.3 million bbls). Gasoline inventories built 760,000 bpd whilst the consensus is for a draw of 674,000 bbls. NYMEX RBOB futures refused to follow the rest of the complex and closed 16 points down yesterday. Heating Oil gained 384 points on the day and the API reported a 270,000 bbl build in distillate stocks. Further overnight price support came from China where buying from teapot refiners and stockpiling helped the country’s May crude oil import jump to 7.59 mbpd, up 39% from a year ago according to data from the General Administration of Customs.

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Posted by Tamas Varga

Tamas Varga has been in the oil industry since 1992 and with PVM for 18 years. During his time in the industry he has gathered a range of experience in the oil markets. At PVM Tamas is in charge of data collection and analysis.