Crude Oil
On Wednesday, WTI oil prices rose by 1.7 percent to close at $48.8 per barrel after U.S. government data showed a surprisingly large crude stockpile draw that signaled the market may have been wrong in predicting slumping demand for energy. The EIA also reported that U.S. gasoline demand was up 6.2 percent from the year-ago period, averaging 9.51 million barrels per day over the past four weeks.
On the MCX, oil prices rose by 2.1 percent to close at Rs.3148 per barrel.
EIA inventory update
EIA crude inventories fell 4.2 million barrels to 459.68 million in the week to July 24. Refinery utilization rates slipped 0.4 percentage point to 95.1 percent of capacity. Gasoline stocks dropped by 363,000 barrels. Distillate stockpiles, which include diesel and heating oil, rose 2.6 million barrels.
Outlook
On an intraday basis, we expect oil prices to trade higher due to bargain hunting at lower levels, with no change in the bearish fundamentals wherein supplies exceeding demand.
Although, the drawdown of inventories reported by the EIA last night gives hope of stability, consistent demand will be crucial factor for oil prices in the near term.
Contributed by Angel Broking
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