NEW YORK – After a volatile trading session last Wednesday, Euro oil prices closed at 2% higher than the previous day. This is despite the fact that the U.S. Federal Reserve has been issuing mixed messages that could lead to further monetary easing policy. But it has been said that this is only if the economy continues to weaken.
The U.S. crude closed at $1.90 or 2.26%, making it to 85.81 dollars a barrel. Brent crude futures closed with a rise of $2.26 or 2.31% thus making it $100.23 dollars a barrel.
Oil stocks in the U.S. fell more than they expected last week. Meanwhile, gasoline and distillate inventories rose above market forecasts as shown in a report by the government’s Energy Information Administration last Wednesday.
According to the agency, crude inventories fell from 4.7 million barrels to 378.2 million in the week of July 6, against expectations of a drop of 1.2 million.
On the other hand, gasoline inventories rose from 2.75 million barrels to 207.73 million while distillates rose from 3.11 million to 120.91 million. The market awaited for the rise of 300,000 barrels and 400,000 barrels, respectively.
Brent crude was boosted by the news that the combined volume of daily load of the four benchmarks of North Sea Oil would fall to minimum levels in August. This figure is based on Reuters’ calculations based on programs of shipment last Wednesday.
The minutes of the Fed meeting last June showed that an additional purchase of government bonds by the Central Bank is not imminent, but would probably occur only if the economic conditions worsen.
“The minutes of the Fed meeting strongly affected the actions and the euro, but the energy complex was not impacted,” said Jim Ritterbusch, president of Ritterbusch & Associates in Galena, Illinois.
“The show of strength in the oil market ahead of the Fed minutes is another positive consideration to the energy market,” he added.
Other analysts said the Fed minutes were a repetition of the central bank’s previous position on a potential easing.
“The Fed sent a mixed message and still doesn’t know what to do.” said Jason Schenker, president of Prestige Economics in Austin, Texas.