Crude oil gained as a weakened dollar and industry spending cuts offset worries of a supply glut. U.S. crude stockpiles increased for a fifth week to the highest in more than 30 years, data from the Energy Information Administration show. Rising U.S. supplies contributed to a global surplus that drove futures almost 50 percent lower last year.
U.S. crude stockpiles expanded by 4.87 million barrels last week to 417.9 million, the highest level in weekly records dating back to August 1982, according to the EIA, the U.S. Energy Department’s statistical arm. Volatility in the oil market has jumped to the highest level since the financial crisis, with prices swinging in a wide range this month following the near 60 percent crash between June and January. Demand is increasing and there are indications that prices are stabilizing, according to Saudi Arabia’s Oil Minister Ali al-Naimi.
Saudi Arabian Oil Minister Ali al-Naimi met in Riyadh with Viktor Zubkov, chairman of state-controlled Russian energy giant Gazprom, and discussed cooperation between OPEC and non-OPEC oil producers. Production rose by 49,000 barrels a day to 9.23 million a day, according to the Energy Department’s statistical arm. That’s the highest level in weekly data that started in January 1983.
Saudi Arabia led a decision by the Organization of Petroleum Exporting Countries in November to maintain collective output quotas at 30 million barrels a day. Technically market is under short covering as market has witnessed drop in open interest by -2.61% to settled at 21987 while prices up 95 rupee, now Crudeoil is getting support at 3100 and below same could see a test of 3029 level, And resistance is now likely to be seen at 3220, a move above could see prices testing 3269.
Natural gas prices dropped after data showed that U.S. natural gas supplies fell less than forecast last week, underlining concerns over weak demand. The U.S. Energy Information Administration said in its weekly report that natural gas storage in the U.S. in the week ended February 6 fell by 160 billion cubic feet, below expectations for a decline of 168 billion. Natural gas storage in the U.S. fell by 115 billion cubic feet in the preceding week.
Inventories fell by 234 billion cubic feet in the same week a year earlier, while the five-year average change is a drop of 178 billion cubic feet. Total U.S. natural gas storage stood at 2.268 trillion cubic feet. Stocks were 542 billion cubic feet higher than last year at this time and 11 billion cubic feet below the five-year average of 2.279 trillion cubic feet for this time of year. A day earlier, natural gas surged 12.0 cents, or 4.48%, to settle at $2.797 after updated weather forecasting models pointed to frigid weather spanning from the Great Lakes-region to the Northeast through February 19.
Bullish speculators are betting on the cold weather boosting winter demand for the heating fuel. The heating season from November through March is the peak demand period for U.S. gas consumption. Despite recent gains, natural gas prices are likely to remain vulnerable amid speculation supplies are more than ample to meet demand. Technically market is under fresh selling as market has witnessed gain in open interest by 23.48% to settled at 8662 while prices down -5.5 rupee, now Naturalgas is getting support at 164 and below same could see a test of 158.9 level, And resistance is now likely to be seen at 177.1, a move above could see prices testing 185.1.
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