Unexpected rise in US oil stockpiles steals the wind from Opec’s sails
Oil prices ended a three-day winning streak today despite edging close to the $70 per mark in the morning.
International standard Brent crude reached up to $69.95 per barrel at around 9.20am, its highest point since November, before slowly giving back gains.
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The benchmark later dipped to $68.81, a 0.8 per cent decrease on the day as US authorities revealed an unexpected increase in oil stockpiles.
The Energy Information Administration said the amount of oil stored in the US jumped by 7.2m barrels last week, surprising analysts who were counting on a drop.
Meanwhile US production reached a record 12.2m barrels per day and imports rose to 386,000 barrels per day.
“Oil saw a surge in volatility on the back of the Energy Information Administration report which showed that oil stockpiles jumped by 7.2m barrels, while the consensus estimate was for a 425,000 drop,” said CMC Markets analyst David Madden.
Brent reached lows of $51.57 on Christmas Eve after months of pressure from increased US shale production sent markets into bear territory.
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Prices have been steadily ticking upwards since oil producing cartel Opec started cutting production in January.
However, prices have not risen fast enough to get to reach the year-highs in October of $85 per barrel.