Futures climbed as much as 1.3 percent in New York after declining 0.9 percent Tuesday. Inventories expanded by 1.44 million barrels last week, the American Petroleum Institute was said to report. That’s less than half the projected 3.9 million-barrel increase the government is forecast to report Wednesday. Some U.S. refiners are delaying maintenance to take advantage of strong margins. While oil has rebounded the past two weeks, crude in the U.S. has struggled to hold above $50 a barrel as prices beyond that level make some shale profitable and boost supply. At the same time, the Organization of Petroleum Exporting Countries and its allies are said to be discussing extending by more than three months the output cuts that expire in March. Iraq, the group’s second-biggest producer, has said production should be reduced by an additional 1 percent to help rebalance the market. Click Read More below for additional detail.
In the week ending January 22, 2016, West Texas Intermediate crude oil prices rose ~9% to close at $32.19 per barrel on January 22, 2016. Crude oil prices will also likely gain due to positive talks from Russia on production cuts. Crude oil prices rose more than 9% to close at $33.22 per barrel on January 28, 2016.
At the beginning of this week, crude oil prices fell by more than 5% on January 25, 2016. Iran’s record crude oil output of 4.13 MMbpd (million barrels per day) in December 2015 led investors to focus on oversupplies in the global crude oil markets. Iran’s crude oil production averaged 3.7–3.8 MMbpd in the months before December 2015. However, the sudden rise in the production levels renewed the focus on oversupplies.
Crude oil prices gained due to speculation about the news. Russia wants to talk with OPEC about cooperating to trim the oversupplies. Investors even ignored massive inventory builds of 11.4 million barrels reported by the American Petroleum Institute on January 26, 2016. They also ignored the U.S. Energy Information Administration’s crude oil inventory report. The announcement from Russia’s oil minister confirmed the news. As a result, crude oil prices continued to rise for the past three days. The prices gained ~9.4% from this week’s low of $30.34 per barrel on January 25, 2016. The bullish sentiment among investors will certainly help crude oil prices rise on today’s trade to post gains on a weekly basis.
The bullish sentiment among investors, due to positive talks from Russia, will cause the prices to rise. This will bring back the momentum in the oil industry. It’s suffering from long-term lower prices. The rise in prices will increase crude oil producers’ revenue like Murphy Oil (MUR), Continental Resources (CLR), Whiting Petroleum (WLL), Marathon Oil (MRO), and Anadarko Petroleum (APC).
more at: http://finance.yahoo.com/news/crude-oil-prices-set-weekly-113135247.html