Crude oil prices posted modest gains early Wednesday through a series of competing market trends, from U.S. oil inventory levels to Brexit concerns, that may determine later momentum. File photo by Monika Graff/UPI. |
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March 29 (UPI) -- Traders shrugged off data indicating supply-side strains to focus more on lower production from OPEC members, sending oil prices higher early Wednesday.
Crude oil prices posted gains Tuesday after a review of market data suggested some of the oversupply was fading. A preview of market data from S&P Global Platts said that, with Brent crude oil trading at a premium to the U.S. benchmark, oil exports from the United States could increase and tighten up the supply situation in the world's leading economy.
The American Petroleum Institute late Tuesday reported a build in U.S. crude oil inventories of 1.9 million barrels, far greater than predicted early this week by Platts. That would normally send crude oil prices lower because inventory builds are indicative of a glut, but traders instead focused on conflict-related production declines in Libya and commitments from Azerbaijan to do more to restore balance.
"Yesterday's feel-good factor shows little sign of waning this morning even as API data revealed that U.S. crude stockpiles edged further into record territory," Stephen Brennock a broker at PVM said in a daily report on market fundamentals.
The price for Brent crude oil was higher than the previous day's close by 0.3 percent to trade at $51.47 per barrel about a half hour before markets opened in New York. West Texas Intermediate, the U.S. benchmark price for oil, was up 0.2 percent to $48.45 per barrel.
Balancing the early-morning gains is the decision from the British government to start the formal process of withdrawing from the European Union. The referendum to leave the EU sent shockwaves through the global economy last year, but by November, the Bank of England said overall economic sentiments had improved as some of the so-called Brexit concerns became factored into the global market.
Phil Flynn, a senior market analyst for the PRICE Futures Group, said in a daily newsletter that official U.S. data on crude oil supplies from the Energy Information Administration will compete with market concerns about Brexit.
"The corresponding rise in the dollar is lowing crude oil rise even with a lot of bullish technical and un-fatal support," he said.
