- Brent crude oil rebounded above $US63 a barrel on Wednesday following a report that showed an unexpected decline in US supplies.
- Crude on Tuesday hit its lowest level since 2017 after President Donald Trump signalled the US would not punish Saudi Arabia over the killing of Washington Post journalist Jamal Khashoggi in its Istanbul consulate.
- Oil prices have rallied this year as market watchers expect that US sanctions on Iran will reduce oil supplies.
- But prices have eased by nearly a quarter from recent peaks amid OPEC’s downgrades on global oil demand and as Trump allows eight countries to temporary import Iran’s oil despite sanctions.
Energy stocks are rallying as crude oil rebounds on Wednesday following a report that noted an unexpected decline in US supplies.
The American Petroleum Institute (API) reported late Tuesday that US crude inventories fell by 1.5 million barrels to 439.2 million barrels for the week through November 16, according to Reuters. The news eased near-term concerns about an oil-supply glut, sending crude prices above $US63 a barrel on Wednesday and recovering some of the previous session’s 6% plunge.
As a result, energy stocks are gaining around. Here’s the scoreboard as of 9:40 a.m. ET:
- Marathon Oil (MRO) +2.13%
- Schlumberger(SLB) +1.39%
- Baker Hughes (BHI) +1.38%
- Chesapeake Utilities (CPK) +1.13%
- Chevron Corporation(CVX)+1.18%
- ExxonMobil (XOM) +0.75%
Crude’s Wednesday surge came one day after it hit its lowest level since 2017, touching an intraday low of $US62.56 a barrel. The sell-off intensified following a statement by President Donald Trump that signalled the US would not punish Saudi Arabia, the world’s largest oil exporter, over the killing of Washington Post journalist Jamal Khashoggi in its Istanbul consulate.
Trump said the US would stand by the kingdom even after the CIA concluded Saudi Crown Prince Mohammed bin Salman ordered the killing of Khashoggi.
Oil prices have rallied this year as market watchers expect that US sanctions on Iran, OPEC’s third-largest oil producer, will reduce oil supplies. Brent crude reached a four-year high of $US86.74 a barrel.
But prices have eased by nearly a quarter from recent peaks after OPEC last month downgraded its global demand forecast for a third straight month amid concerns about the prospect of slowing economic activity around the world, and as Trump administration earlier this month said it will allow eight countries – China, India Turkey, South Korea, Italy, Greece, Japan and Taiwan – to temporary import Iran’s oil despite sanction.