Crude went above USD 75 a barrel for the first time since 2014, as global oil supply outages occur regardless of OPEC’s pledge for a rise in production.
President Donald Trump has pushed for Saudi Arabia to boost output by 2,000,000 barrels a day, at a time when global outages in Libya, Venezuela and Canada have kept retail gasoline prices high ahead of midterm elections. U.S. crude stockpiles are expected to tighten further, since its lowest in January.
The Director of Futures at Mizuho Securities U.S.A. Inc., in New York, Bob Yawger, stated in a Thursday’s inventory report that the market is anticipating a very “bullish number” and “all eyes will be on that Cushing number.”
The U.S. is pushing allies to end imports of Iranian crude, while global supply disruptions continue, and American crude inventories are at its lowest since January. Morgan Stanley increased its prediction of Brent crude’s cost to USD 85 a barrel through the third quarter of 2018 with a tighter market than previously anticipated. West Texas Intermediate crude for August jumped USD 1.19 to USD 75.13 a barrel at 9:41 a.m. on the New York Mercantile Exchange. Brent for September skyrocketed USD 1.05 to USD 78.35 a barrel on the ICE Futures Europe exchange. The benchmark traded at USD 5.64 premium to WTI for September.
The premium for U.S. oil increased as analysts consider diminishing supplies in a supply hub in Cushing, Oklahoma. Since 2014, WTI price hasn’t closed that much lower intraday.