Commodity Market Updates For Sep 02, 2016
Crude oil prices held gains in Asia on Friday with investors monitored developments by major producers planning to meet later this month to discuss a freeze in output and looked ahead to figures on U.S. drilling efforts. Last week, oilfield services provider Baker Hughes said the number of rigs drilling for oil in the U.S. was unchanged at 406. That followed eight straight weeks of increases.
Crude oil for October delivery on the New York Mercantile Exchange rose 0.65% to $43.44 a barrel. On the ICE Futures Exchange in London, Brent oil for November delivery gained 0.68% to $45.76 a barrel. Overnight, oil prices fell to a new three-week low for the second day in a row on Thursday, extending losses from the prior session after bearish data from the U.S. Energy Information Administration underlined concerns over a global supply glut.
A day earlier, New York-traded oil futures sank $1.65, or 3.56%, after weekly supply data showed a surprisingly large build in U.S. crude and distillate stockpiles and a smaller-than-expected drawdown in gasoline. According to the U.S. Energy Information Administration, crude oil inventories rose by 2.3 million barrels to 525.9 million, which the EIA considered to be “historically high levels for this time of year”.For distillate inventories including diesel, the EIA reported an increase of 1.496 million barrels. The report also showed that gasoline inventories declined by 691,000 barrels, disappointing expectations for a 1.157 million-barrel drop.
Chances that the upcoming meeting among major oil producers set to take place in Algeria in late September would yield any action to reduce the global glut appeared minimal after Saudi Arabia’s energy minister said last week that he does not believe any “significant intervention” in the oil market is necessary. An attempt to jointly freeze production levels earlier this year failed after Saudi Arabia backed out over Iran’s refusal to take part of the initiative, underscoring the difficulty for political rivals to forge consensus.