Oil fluctuated near stability during yesterday morning but held onto gains after the report on reserves from the United States last week, released by the Department of Energy (DoE). Additionally, the weaker dollar contributed to the movement.
US oil reserves rose by 118,000 barrels last week, crude oil for August closed 1.13% higher at $72.45 per barrel on the New York Mercantile Exchange (Nymex), while Brent crude for August advanced 1.41% to $76.78 per barrel on ICE. According to the data released yesterday, US production saw the largest weekly decline so far this year. Although analysts pointed out that temporary factors influenced the drop, as the tropical storm Cindy disrupted operations in the Gulf of Mexico during that period, the numbers were helpful.
US oil production fell to 9.25 million barrels per day last week, down from 9.35 million barrels per day the previous week. The DoE also reported that US oil reserves increased by 118,000 barrels last week, while analysts had predicted a decrease of 2.4 million barrels. Gasoline reserves, on the other hand, declined by 894,000 barrels, surpassing the economists’ expected drop of 600,000 barrels.
Meanwhile, regarding the exchange rate, the weaker dollar supported the contracts to hold onto gains, making oil cheaper for holders of other currencies, thus increasing investor appetite.
