|News||Crude stabilized around $80 per barrel awaiting U.S earnings|
|Analysis||Crude oil future contracts stabilized in early trading around $80 per barrel, as investors anxiously await U.S companies’ fourth quarter earnings, where expectations are increasing that results may show better than expected profits.|
Positive earnings, as so far anticipated, will reflect bullishly on equities and indices, therefore rising risk appetite and better expectation for the economic outlook will affect commodities and support crude’s continues rise.
Yesterday, the Dow Jones Industrial Average gained 0.5% after U.S companies released data that surpassed expectations, which in its own role contributed in supporting crude prices to trade around $80 per barrel after contracts had sharply dropped to record their lowest at $78.35 per barrel, affected by the EIA report.
The weekly EIA report released yesterday showed gains surpassing expectations in crude inventories by 3.7 million barrels, compared to the previous rise of 1.3 million barrel. Oil inventories reached 331.0 million barrels higher than the medium term average for this time of year. As for motor gasoline, it managed to rise by 3.8 million barrels last week, where it still remains higher than the medium term average, in addition to distillate fuel inventories that include heating fuel, which has risen by 1.4 million barrels on the back of warmer weather and inventories remain above the average.
Rising crude inventories in the U.S, the largest energy consumer in the world, revived prevailing weak consumption and demand on heating and motor fuel, especially as the unusual cold wave that dominated the Northern Hemisphere started to retract; thus, negatively effecting prices that have risen throughout this week to record levels near $84 per barrel, the highest in 15 months.
In NYMEX, heating future contracts for February delivery gained to record $2.10 per gallon by 0.79 cents; motor gasoline rose by 0.3 cents to record $2.06 per gallon, while natural gas followed and climbed by 2.7 cents to close at $5.76 per 1000 cubic feet. Meanwhile, in London Brent future contracts for February delivery added 28 cents to $78.59.
Crude oil contracts opened today at $79.65 per barrel, recording the highest at $80.15 and lowest at $79.55 per barrel, currently trading around $80 per barrel.