Oil drums

Oil prices increased on Wednesday, after a decrease in US gasoline, diesel and heating oil stocks, which gave investors hopes of an improvement in the US oil demand.

Brent crude increased by 60 cents to $105.95 a barrel, while US crude grew by 41 cents at $93.78, reported Reuters.

Prices recovered after the release of American Petroleum Institute (API) data, which revealed a drop in the stocks of gasoline and distillate fuel stockpiles, which include diesel and heating oil, by 4.3 million barrels and 2.73 million barrels, compared with analysts’ expectations of a 338,000-barrel and 1.3 million-barrel drop respectively.

Investors overlooked the overall crude inventories, which increased by 871,000 barrels in the week to 1 November to 382 million barrels.

Oil prices increased after reports of Libyan militia fighters on the government payroll fought each other on the streets of Tripoli, which showed the government’s inability to secure oil fields and ports.

The fight has prolonged the disruption oil supplies in Libya, which could create demand for oil.

Investors are now waiting for stockpile data from the US Energy Information Administration (EIA) for clarity on demand.

As talks are progressing between Iran and the West over Tehran’s nuclear programme, it is providing a breather from supply concerns. Iran revealed that a framework agreement was possible as early as this week on its nuclear programme.

Image: Brent value increased after US gasoline, distillate stocks decreased by more than expected. Photo courtesy of freedigitalphotos.net.

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