Crude prices continue to climb higher on the last day of the trading week, as it heads for a second weekly gain amid falling US crude stockpiles. Positive economic data from the US and China, the world’s two largest oil consumers, boosted the commodity’s prices higher. As investors focus on Ukraine’s upcoming presidential elections scheduled for Sunday, the violence in Libya has also weighed on oil prices.
Futures for the North American West Texas Intermediate for July delivery edged 0.11% lower, trading at $103.86 a barrel on the New York Mercantile Exchange at the time of writing. While the European benchmark Brent crude for July settlement rose 0.07% higher to $110.45 a barrel on the ICE Futures Europe exchange at the time of writing.
Data from the US department of Energy released on Wednesday showed that crude oil inventories dropped by 7.2 million barrels in the week ending May 16, falling lower than analysts’ estimates of a drop by 5.6 million barrels.
Supplies at Cushing, Oklahoma, the delivery point for WTI, dropped by 225,000 barrels to 23.2 million in the last week, data from EI showed.
“The destocking was largely due to developments on the US Gulf Coast, where crude oil stocks declined by 5.7 million barrels from a record level. Imports plunging to a 17-year low were chiefly responsible for the inventory draw,” according to an analyst note from Commerzbank Corporates & Markets.
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The Chinese flash Purchasing Managers’ Index (PMI) released by HSBC Holdings and Markit Economics showed a preliminary reading of 49.7 in May, rising from the previous figure of 48.1 seen in April and beating analysts’ estimates. A reading above 50 indicates expansion, while a reading below signifies contraction.
The ongoing violence in Libya continues to weigh on global oil prices, as fights broke out in the nation’s capital Tripoli on Wednesday.
Libya oil’s production dropped to 210,000 barrels per day, compared to 300,000 barrels per day recorded last week, according to analysts. Libya’s output levels were at 1.4 million barrels per day last year. Meanwhile the nation’s major oilfields of El Sharara and El Feet remains shut, despite the government’s plans to reopen them.
Ukraine will be the main focus for traders this weekend, as the country will be holding its presidential election on May 25, which is expected to spark more protests.
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