Sharp Rise for WTI as Cushing Stockpiles Fall

by Nick Bond, KPI Bridge Oil
Wednesday July 31, 2013

Crude markets were on the rise today, supported by positive economic news in the United States and a draw on Cushing inventories.

Prices started the day with an early rise as the Commerce Department reported that second-quarter GDP in the U.S. grew at 1.7% annualized rate, outperforming the reading of 1% expected by many analysts.

The move continued as the EIA reported that although total U.S. Inventories rose 431,000 barrels, Cushing stockpiles fell by 1.9 million barrels.

The Cushing storage hub, which is the pricing point for WTI, has seen draws recently as pipelines and railroads continue to alleviate the glut of oil and has helped to narrow the spread between WTI and Brent.

Gains held their position as the Fed announced it would maintain its stimulus program and keep interest rates unchanged.

Investors were relieved to learn that the central bank is in no rush to reduce the bond-purchasing efforts in order to promote modest growth in the the U.S.

Across the pond, Brent found support today as OPEC output dropped in July, stemming from Libya's drop in production and the fact that all but one oil terminal remains closed due to labor protests.

Attention now switches to Friday's report from the Labor Department which will give insight to the state of the U.S. jobs market.

WTI gained a solid $1.95 to settle at $105.03/bbl while Brent pushed up $0.79 to settle at $107.70/bbl. Bunker prices were firm in the primary ports.

About KPI Bridge Oil

KPI Bridge Oil is one of the world's leading international bunker broking and trading firms. With a network of offices that covers every major time zone, we have an in-depth knowledge of ports and bunker markets around the world. Our access to real-time market information and long-established credit lines with suppliers means we use our buying power in the right place and at the right time. All this ensures our customers enjoy competitive prices - and on favourable terms.

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