Brent for September settlement was 4 cents higher at $46.24 a barrel on the London-based ICE Futures Europe exchange. The contract fell 97 cents to $46.20 a barrel on Thursday. Prices are down 2.8 percent this week. The global benchmark traded at a premium of $1.61 to WTI. U.S. crude inventories dropped by 2.34 million barrels last week to 519.5 million, the EIA reported Wednesday. Gasoline stockpiles rose to 241 million barrels, the highest level since April, while crude production gained for a second week.
American Dollar to Canadian Dollar = 0.815026; American Dollar to Chinese Yuan = 0.154635; American Dollar to Euro = 1.208318; American Dollar to Japanese Yen = 0.009180; American Dollar to Mexican Peso = 0.049846.
A rebound in oil prices this year from 12-year lows is in danger of coming to a crashing halt, as the main engine of global demand growth for the past several years starts to sputter amid signs of a gasoline glut. Crude oil has rallied more two-thirds from its mid-January nadir on robust demand from refineries worldwide, stoking cautious optimism among producers and exporters that the epic rout that slashed global prices by 75 percent between mid-2014 and early 2016 is finally over. But rampant production of oil products, especially in Asia, is threatening to derail that recovery. Several major gasoline importing countries have started to export, as excess supplies of fuels overflow storage facilities and erode refinery profits. "Asia has overcapacity in refining, so that's ruining margins," said Oystein Berentsen, managing director for crude at oil trading firm Strong Petroleum in Singapore.
The crude oil market is a puzzle with many moving parts. While supply and demand fundamentals play a significant role in the path of least resistance of the price of the energy commodity, technical factors such as herds of buyers or sellers can also dictate short-term price trends. At times fundamentals and technical factors come together, and at others, they do not. Sudden changes that disrupt fundamentals can cause a sudden shift in herd behavior in the crude oil futures markets. More than half the world's petroleum reserves are in the Middle East, an area of the world that has been the source of turmoil for more than a few decades. Therefore, the politics of the Middle East can play a significant role in the path of least resistance for the price of the energy commodity, and over coming days and weeks, that role may be expanding, perhaps dramatically.