With stockpiles of crude oil climbing in US probably by 1 million barrels last week, crude prices have dropped from one month highs. The gains registered to the tune of 2.7% yesterday were more due to panic-driven price action, analysts have said.
On the NYMEX,WTI crude oil has dropped by 0.44% and was seen trading at $88.90 a barrel in electronic trading on 3.55 PM. Its European counterpart brent crude dropped by 0.26% and was found trading for $111.39 a barrel.
Meanwhile in India, MCX crude oil for December delivery was seen trading at Rs.4910 a barrel, a loss of 0.49%.
Meanwhile, as Gaza conflicts unfold US Secretary of State Hillary Rodham Clinton has started off on a visit to talk with stake holders in Middle East. United Nations Secretary Ban Ki-moon is also expected to reach Israel Tuesday.
A US energy department update for tomorrow may show crude oil stockpiles have gained by 1 million barrels last week, Bloomberg has predicted.
“The market remains well-supplied,” Carsten Fritsch, an analyst at Commerzbank AG in Frankfurt, who forecasts WTI futures will rise above $90 a barrel before the end of the year, said to Bloomberg. “The bias is upwards due to supply risks and geopolitical tensions. The risk of an Israeli invasion into the Gaza strip is still there.”
US crude stockpiles jumped to 375.9 million barrels in the week ended Nov. 9, as per the previous update dated November 15. Crude oil output climbed 32,000 barrels a day to 6.71 million in the week to Nov. 9, the fastest rate since May 1994.
As the Iran issue simmers in the background although with a stutter, crude output from that nation is increasingly under pressure even as countries like US and Saudi Arabia has chipped in with production.