The release of crude oil inventories earlier today showed a surprise increase in the number of barrels.
Crude edges up in Asia as greenback dives
On Monday, oil started moderately higher in Asia supported by a strong demand, continuing supply cuts lead by OPEC and Russia, and a weakening greenback, which aids market sentiment.
March delivery US West Texas Intermediate crude futures added 0.44% being worth $66.42 a barrel.
At the same time, April delivery Brent crude futures gained 0.03% trading at $70.17 a barrel.
Crude prices also derived decent support from a tumbling dollar, hitting a fresh three-year minimum versus a basket of other crucial currencies on Friday. Donald Trump and his Treasury Secretary raised the oil prices with their speeches about the weak dollar in Davos last week. The US dollar index rose from Friday’s low of 88.50 to 89.50, although it has trended abruptly lower for the last two weeks on remarks from American policymakers as well as worries that the American tax cuts will increase the deficit.
The previous week, crude prices concluded Friday's session settlement to their strongest value since late 2014, following everlasting optimism that OPEC and Russia-led output reduction would keep draining the market of excess supplies. OPEC and Russia started cutting the oil production in January 2017 and agreed to continue it until the end of 2018. This news had the greatest influence on the oil prices.
There is another source of the oil support. It is a large premium in the front-month Brent oil contract over those for future delivery. Investments in crude futures and options reached a new record high last week.
Despite the rise of crude oil prices nowadays, experts predict the fall of prices later in the year because of the rising US production. Nowadays, US production is already at the level with the top exporter Saudi Arabia. Analysts predict the increase in US oil production in 10 million barrels per day. Last week, the number of installations for drilling oil wells in the US increased by 12 pieces to 759. Based on that, the Bank of America strategists forecast the average prices of $60 per barrel for WTI and $64 for Brent in 2018. However, JP Morgan analysts give more positive predictions of $ 65,63 per barrel for WTI and $70 for Brent.
The yellow metal reached the highest levels in 6 years amid the global risk aversion.
The yellow metal could not stay for a long time near the $1,401 level.
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