US crude rises $1.56/bbl on stock market rally, lower inventories

18 July 2013 20:42  [Source: ICIS news]

HOUSTON (ICIS)--NYMEX light sweet crude for August delivery extended the previous session’s gains, settling at $108.04/bbl, up $1.56, on Thursday, tracking a rally in the stock market in response to released data showing a two-year high in factory activity in the key Mid-Atlantic region.

Crude futures have also been factoring in the weekly supply statistics from the Energy Information Administration (EIA) showing a substantial drawdown in inventories. For the past three weeks, crude oil stockpiles have declined 27m bbl in order to satisfy refining demand.

As more crude oil moves by rail and pipelines out of the the Cushing, Oklahoma, storage hub, West Texas Intermediate (WTI) continues to re-align in value with global markets.

Upside momentum also triggered technical buy-stops, lifting August crude to an intra-day high of $108.43/bbl, up $1.95, before retreating. WTI is now in search of a top but also in overbought territory. The August WTI contract goes off the board on the NYMEX on Monday.

ICE Brent for September delivery lagged behind its American counterpart, topping out at $108.80/bbl and settled at $108.70/bbl, up 9 cents. The negative trans-Atlantic Brent-WTI arbitrage continues to narrow, with the September arb inside $1.00.

By: Ignacio Sotolongo
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