Crude Oil Surged More than $109 per Barrel on US Inventories Data

Crude oil futures gained on Wednesday as United States released its key data on oil inventories. Escalating riots and violence in Nigeria also created uncertainty among investors on global oil supply and hence resulted in further hike in oil prices.  According to the latest news almost 33 people were killed due to violence in Nigerian elections. Nigeria happens to be world’s 12th largest oil producer.

Crude oil price has aggressively jumped since February due to tensions in Libya, other Middle East countries and North Africa.

Crude oil futures contract for June delivery jumped 1.3 percent or $1.38 to $109.66 per barrel on Wednesday at New York Mercantile Exchange. The dollar index DXY which measures the greenback’s performance against its major rivals also declined 0.8 percent to 74.497. This resulted in further appreciation of crude oil futures.

As per latest report of American Petroleum Institute crude stock piles increased by 667,000 barrels for the week ended April 15th, 2011 as compared to expected increase of 1.6 million barrels.

Analysts from Commerzbank commented, “The prices are being driven by the weaker dollar and a favorable equity-market environment, an additional boost after trading had closed yesterday came from the API inventory data, which showed that gasoline stocks had dropped by 1.8 million barrels over the past week.” They further added, “The stock depletion has occurred despite a rise in utilization of refinery capacity, suggesting that demand too has risen.”

Gasoline inventories dropped by 1.8 million barrels while distillates such as heating oil and diesel declined by 3.4 million barrel for the week.


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