Crude prices started this Friday session on a bidding note, gaining 1.67-2.17%, fuelled by expectations that the Doha meeting will have a successful outcome. WTI trades on the edge of $38, Brent struggles to occupy the $40 level. Yesterday’s prices retreated after the oil research company Genscope released a warning note on crude reserves in Cushing, the biggest US oil storage, which grew 255,804 barrels in the week from March 30 to April 5. Reserves grew despite Transcanada Corp. halting its supply of 590K barrels last Saturday.
Cushing remains the main crude stockpile, which is used by the NYMEX traders. Its current reserves are dangerously near maximum capacity of 65M barrels.
On Wednesday, the Energy Information Administration (EIA) reported that commercial crude stockpiles in the US fell by almost 5M to 529.9M barrels but still are on record high level for this time of a year. The US crude output pace declined by 14K barrels daily to 9.008M barrels, slowest rate for the last 17 months. In June 2015, production reached a peak of 9.6M barrels daily, the highest pace for the last 40 years. It was a turning point for crude prices, helping them to return to growth despite increased bearish pressure.
Goldman Sachs’ forecast regarding the output freeze agreement in Doha remains pessimistic – analysts raised doubts about positive results, saying instead that crude output of the OPEC members may rise by 600K barrels this year. They expect the prices to hover near $35 at the end of this year.
The Baker Hughes report, which is due later today, may have a key impact on. Traders wager on further cut of rig count in the US.
USD/JPY failed to show substantial rebound after losing ground, diving to the 108.50 level on a sharp Yen buy-out. The pair gained 0.54% to 108.79. EUR/USD has mixed sentiments, the pair swings in the range of 1.1340-1.140. Release of FOMC minutes on Wednesday caused some choppy price action, but failed to pave the upward or downward way for the pair. GBP/USD struggles to remain above 1.40, the pair shows vulnerability to any Brexit news and rumours. AUD/USD advances by 0.44% to 0.7539 on crude gains, CAD outperforms the US Dollar due to the same reason, USD/CAD declined by 0.37% to 1.3097.
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