US crude futures surge $1.90/bbl on investor optimism

11 July 2012 21:36  [Source: ICIS news]

HOUSTON (ICIS)—NYMEX light sweet crude (WTI) for August delivery settled at $85.81/bbl on Wednesday, up $1.90 versus the previous close, as investors poured money into the energy complex.

The action came despite the fact that the US Federal Reserve did not signal further stimulus for the economy which would have helped raise energy demand.

The Fed released the minutes for the June meeting leaving options for stimulus open but only if the economy deteriorates further.

The stock market fell sharply and the dollar shifted higher against the euro, capping the rally across the energy complex.

Crude prices also factored in the weekly supply statistics from the Energy Information Administration (EIA) showing a much greater-than-forecast drawdown in crude stocks, although most of the decline was on the US West coast. Inventories for gasoline and distillate were bearish for producers, showing a much greater-than-expected build.

Upside momentum lifted August WTI to $86.49/bbl, up $2.58/bbl, before giving back a portion of the gains, but the overall bias remained to the upside.

ICE Brent for August delivery settled at $100.23/bbl, up $2.26 but the upside momentum, post-settle, lifted Brent up to $100.83/bbl before running out of steam.

By: Ignacio Sotolongo
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