Crude Oil Faces Intraday Hurdle While Investors Await EIA Report

Crude Oil Faces Intraday Hurdle While Investors Await EIA Report

Crude Oil Faces Intraday Hurdle While Investors Await EIA Report

The temporary circumstances of a slightly weaker USA dollar and a shutdown in production in Libya caused crude prices to climb modestly on Tuesday, with Brent 23 cents higher at $60.20 per barrel, and West Texas Intermediate settling up 65 cents to $51.65 per barrel. For a second consecutive session, the markets are trading inside last Friday's wide range which tends to indicate trader indecision and impending volatility.

As Libya was exempted from a combined 1.2 million bpd output cut deal announced by the OPEC and its allies last week, analysts said the latest output reduction would help prop up investors' sentiment and ease the ongoing concerns over a supply glut.

US West Texas Intermediate (WTI) crude futures were at $51.35 per barrel, up 20 cents or, 0.4 percent.

Prices rose almost one-percent earlier in the session, but the big wave of buying that could've triggered a breakout to the upside failed to materialize. In the OPEC monthly oil market report released on Wednesday, Saudi Arabia reported production growth in November of 450,000 barrels a day. Meanwhile, trade tensions receded as China moved to lower duties on USA vehicle imports. Additionally, President Trump told Reuters in an interview that trade talks with China were taking place to diffuse the trade disputes between the world's two biggest economies.

USA crude inventories fell by 1.2 million barrels in the week to December 7, compared with expectations for a decrease of 3 million barrels. This follows a 7.3 million barrel decline in the previous week. Analysts were expecting a build of 2.461 million barrels for the week.

The Organisation of the Petroleum Exporting Countries (OPEC) expects demand for its oil to fall next year, as global supplies, particularly in USA shale continue to rise.

According to the IEA, the United States is now the world leader in crude oil production.

The publication noted that the main contribution to the growth in supply in 2019 will be made by the USA, Brazil, Russia and the United Kingdom, while Mexico and Norway will demonstrate the strongest decline in production among others.

Brent crude, the global benchmark, rose $1.07 to $61.27 by 0947 GMT. Oil demand growth in Asian emerging markets remains in focus as weaker local currencies and higher crude prices could weigh on countries' purchasing and consuming power, Malaysia's state-owned energy company Petronas cautioned this week.

China made its first major US soybean purchases in more than six months on Wednesday, while Beijing also appears to be easing its high-tech industrial push, dubbed "Made in China 2025", which has long irked Washington.

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