Brent crude up $1/bbl as dollar weakens and US inventories fall

18 November 2010 06:28  [Source: ICIS news]

SINGAPORE (ICIS)--Crude futures rose by more than $1/bbl (€0.74/bbl) on Thursday, supported by US inventory declines and a weaker dollar, following a decline of more than $1/bbl overnight.

At 06:14 hours GMT, January Brent on London’s ICE futures was trading at $84.28/bbl, up by $1/bbl. Earlier the North Sea benchmark hit a session high of $84.32/bbl, up by $1.04.

Meanwhile, December NYMEX light sweet crude futures were trading at a session high of $81.49/bbl, up by $1.05/bbl.

Wednesday's slump was caused by concerns about a possible drop in demand following announcements by the Chinese government of planned anti-inflationary measures in the country and worries over debt levels in the eurozone.

However, on Thursday the US dollar declined against other leading currencies, giving back some of its recent gains.

The fall served to make commodities such as oil more attractive to overseas investors.

US government inventory data from the Energy Information Administration (EIA) revealed an unexpected massive fall in domestic crude stocks of some 7.3m bbls, the largest drop in 14 months.

Oil product inventories also recorded significant declines, with gasoline stocks down by 2.7 m bbls and distillates falling by 1.1m bbls.

However, the crude stock data revealed a rise of 1.27m bbls at the key Cushing Oklahoma delivery terminal.

As a result, the differential between Brent and NYMEX light sweet crude futures widened. 

($1 = €0.74)

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By: James Dennis
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