Analysts wonder if bullish sentiment might be heating up again: file Image/Pixabay
Even though the situation is fleeting at best, news of U.S. stockpiles rising less than expected, coupled with expected supply disruptions as a result of the U.S. sanctions against Venezuela, caused crude prices on Wednesday to climb to a two month high.
West Texas Intermediate ended Wednesday's session up 92 cents to $54.23 per barrel, its best closing prices since late November; Brent rose 43 cents to $61.75 per barrel.
The bullish attitude of traders was stoked by the disclosure from Energy Information Administration data showing that crude inventories rose 919,000 barrels last week, compared with analysts' expectations in a Reuters poll for an increase of 3.2 million barrels.
Anthony Grisanti, founder and president, GRZ Energy
I'm seeing $60 [for WTI] over the next four or five weeks
While these numbers are bound to change quickly, they nonetheless contributed to what CNBC's Futures Now host Seema Mody described as what is shaping up to be "the best January ever"; Anthony Grisanti, founder and president of GRZ Energy, added that "I'm seeing $60 [for WTI] over the next four or five weeks, and if we get a China trade deal, then sooner than that."
Although Wednesday saw the usual expression of concern over prospects of a global economic weakening, Stephen Brennock, an analyst at PVM Oil Associates Ltd., touched upon a subject that has been ignored in this busy week of geopolitical news: U.S. president Donald Trump's determination to keep oil prices down so that American motorists continue to get a break at the pump.
He said, "A word of warning: the U.S. cannot simultaneously choke off supplies in both Venezuela and Iran without causing a spike in prices."
Bloomberg noted that "The question is whether the Saudis and their allies can increase production high enough, and keep it there, to compensate for simultaneous losses in Iran and Venezuela.
"Although the kingdom sits on about 1.4 million barrels per day of spare production capacity, according to the International Energy Agency, even that could be strained by a deep and prolonged outage."