NewsThe EIA ReportPrevious-2.2 million barrelsForecast0.1 million barrelsAnalysisCrude prices for the second day in a row have continued to climb to record its highest this morning around $84.00 per barrel, due to effects of the airline crisis in Europe. In addition, there seems to be a rising appetite in risk taking by investors with good earnings, as well as the strengthening demand that seemed to show a rise from China inline with the fragility witnessed last March. This and the size of the drop crude inventories have witnessed in the US.
Crude opened today around $84.00 recording its highest around $84.61 and lowest around $83.84 per barrel, while it currently trades around $84.22 per barrel. Meanwhile, crude yesterday closed around $84.02 gaining $0.66.
The European Transport Ministers' agreement assisted in opening up some airports in Europe and is gradually resuming air flight movement in support of oil prices; therefore, pointing to returned demand on jet fuel once again, especially after the five day shutdown.
On the other hand, investors seem to have a better risk appetite as indicated by the gains in global stock markets, especially after good released from Goldman Sachs Group and Apple, where earnings beat expectations in the first quarter; the Dow Jones closed higher yesterday by 25.01 or 0.23% recording 1117.06. Meanwhile, Nikkei climbed by 189.37 by 1.74% to close around 11090.05 points.
Furthermore, the API report yesterday showed a decline in inventories from the biggest energy consumer in the world, and better than expectations at 700.00 thousand barrels the previous week; whereas expectations pointed to a drop by 300.00 thousand showing an improvement in demand from the biggest energy consumer. In a more similar note, China, considered to be the second largest energy consumer, stated that demand on oil last March rose by 12.8%, thus recording growth for the seventh month in a row!
The release of the EIA report is anticipated today to report a buildup in commercial crude inventories by 0.1 million barrels. The figures will affect oil negatively, especially after the drop seen last week and API that already reported a decline in inventories.