Commodities@Moneycontrol: Crude oil prices likely to firm up further

Britain's Prime Minister Theresa May | AP

Britain's Prime Minister Theresa May | AP

Oil prices remain supported by easing concerns over a prolonged trade dispute between the USA and China after China's President Xi Jinping gave a speech on Tuesday with a conciliatory tone.

Oil had already started off Tuesday with big gains as the United States closed in on a decision on whether to launch a strike on Syria in response to an alleged gas attack.

Additionally, decreased demand from US Gulf Coast refineries amid spring turnaround season has left more volume available for the export market.

In other news, US commercial crude inventories rose by 3.3 million barrels in the week through April 6.

On Wednesday, reports that Saudi Arabia's air defenses intercepted a missile launched towards the country by Houthi rebels in Yemen further stoked geopolitical tensions and supported prices.

The market is also keeping an eye on developments out of Syria, after reports an air base near Homs was struck by missiles.

The threat came after the Russian ambassador to Lebanon said his nation's military would intercept American missiles and potentially target the USA craft that fired them. "Get ready Russian Federation, because they will be coming, nice and new and 'smart!'", he wrote in a post on Twitter.

Oil managed a daily close above the year's high of $66.66 as tensions in Syria gave WTI a key boost to the upside in yesterday's trade.

Commodities@Moneycontrol: Crude oil prices likely to firm up further

West Texas Intermediate crude futures gained 3.3 percent, or $2.07, to $65.49 a barrel.

USA crude oil inventories rose by 3.3 million barrels to 428.64 million barrels, while crude production last week hit a record 10.53 million barrels per day.

Last night, United States stockpile data from the Energy Information Administration (EIA) sent oil markets into increased volatility.

The price of oil futures rose more than 2 per cent in the course of Wednesday, topping $67 a barrel for the first time since December 2014.

OPEC's main objective for the cuts is to eliminate a global surplus in oil stocks and rebalance the market.

"Geopolitical risks outweighed an unexpected rise in inventories in the U.S.", ANZ bank said on Thursday.

The current deal, under which OPEC and non-OPEC producers are cutting supply by about 1.8 million barrels per day, expires in March 2018.

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