WTI Crude received a pummelling on Tuesday with prices sinking below $49.50 after reports displayed an inflated rise in U.S inventories which revived concerns over the excessive oversupply in the markets.
Oil fell for a third day on Wednesday, nearing $50 a barrel for the first time in three weeks, as investors grew increasingly doubtful that OPEC members will agree to cut output and as U.S. inventories staged a surprisingly large increase.
Crude oil prices hit a new high for the year as refinery runs and imports hit lows for the year. The Energy Information Administration (EIA) reported a 5.2 million barrel drop in crude oil supply even as U.S. refinery runs fall to 85% of their operable capacity--the low for the year. Refiners ran a mere 15.4 million barrels of oil a day while overall product demand is running more than 20 million barrels a day.
While crude oil prices flirted with $50 a barrel because of the November crude oil expiration yesterday, today oil is running hot on a weak dollar and UK inflation data. The proclaiming by Fed Chair Janet Yellen that the economy could run hot for a while is a signal that oil prices should continue to run higher.
Just as April showers bring May flowers, plentiful monsoon rains in India tend to drive up demand for gold jewelry among rural, income-flush farmers, who make up a third of the country’s consumption of the yellow metal.
As crude oil traders focus on rising rig counts and the potential for OPEC production cuts, a critical battle against ISIS has been unfolding in Iraq overnight. Reuters News reports that Iraqi government forces, with air and ground support from the U.S.-led coalition, launched an offensive to drive the Islamic State from the northern city of Mosul, the militants' last major stronghold in the country.