On Thursday, both US WTI (West Texas Intermediate) and UK crude oil futures’ prices jumped more than 2 per cent as US crude inventories fell more than anticipated, while a sharply weakening US Dollar ahead of a much-awaited nonfarm payrolls data had added to further impetus.
In a technical viewpoint, in the day’s rally in crude oil prices had momentarily sent the US crude futures above their 50-day moving average, widely contemplated as a bullish signal among investors. Aside from that, the US EIA (Energy Information Administration) said in a statement that US crude oil inventories declined by 7.2 million barrels last week, spurring up optimisms among market participates.
Nonetheless, on the physical front, the rally seemingly had largely driven by a Biden Administration push to keep gasoline flowing and bring fuels to areas worst-hit by Hurricane Ida, while a US oil regulator’s remark that the amount of oil output shut-off in the US Gulf of Mexico had reached 1.7 million bpd (barrels per day) or about 1 per cent of the world’s entire crude oil production, had stepped up investors’ morale further.
On top of that, the US Dollar Index (DXY) measured against a basket of six major currencies on an average wobbled again on Thursday and fell over 0.3 per cent to 92.20, making oil cheaper for the investors who were holding the black gold futures in other currencies.
Crude oil gains as US crude oil inventory declines
Citing statistics, in the day’s commodity market wind-down, UK crude futures’ prices gained over 2.0 per cent to settle down at $73.03 a barrel, while US WTI crude climbed 2.0 per cent to $69.99 a barrel.
Meanwhile, addressing to the impacts of Hurricane Ida, a director of energy futures at Mizuho, Robert Yawger said, “There are good reasons for this rally - we have 1.5mln barrels still offline in the Gulf, yesterday's crude number was down 7.2 million barrels and storage was at its lowest level since September 2019”.