Crude Oil Rallies on Reported Cushing Drawdown
The WTI posted a 2-percent gain Thursday amid a report that inventories are down at the Cushing, Okla., crude storage hub.
“The news event was storage at Cushing,” Bob Yawger, director of the Futures Division with Mizuho Americas, told Rigzone, referring to Genscape’s report of a 1.1 million-barrel decrease from July 27 to 31. “That’s the big issue today.”
September WTI futures gained $1.30 Thursday, settling at $68.96 per barrel after trading within a range of $66.92 to $69.36. The October Brent benchmark price increased $1.06 to settle at $73.45.
“The bigger issue, in my opinion, was that we took out support versus $67.03 from July 17 and 18,” continued Yawger. “We did trade below but still close to $67 even a big whole number. There was no sign that the specs were bailing against either of those numbers, either the double bottom or the big whole number, and I think that certain people took that as a sign that this bear market … may be over and maybe it’s time to cover some of those shorts we have on the books and you have this super-sized short covering rally through the course of the day. I reckon it’s nothing more than that.”
In addition, Yawger noted that “a lot of talk” about Iran ramping up military exercises in the Persian Gulf – particularly the Strait of Hormuz – contributed to the increasing crude benchmarks Thursday.
Henry Hub natural gas futures for September gained six cents to settle at $2.82 while reformulated gasoline increased two cents to end the session at $2.07 a gallon.
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