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Crude prices soar on bullish supply data, Egypt concerns

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Investing.com - Crude prices shot up to 14-month highs on Wednesday after U.S. data revealed the country's stockpiles took a sharp decline last week, while ongoing unrest in the Middle East pushed up prices as well.

On the New York Mercantile Exchange, light sweet crude futures for delivery in August traded up 2.21% at USD105.82 a barrel on Wednesday, off from a session high of USD105.96 and up from an earlier session low of USD104.07.

Prices hit highs not seen since May of 2012 on Wednesday after the Energy Information Administration reported that U.S. crude oil inventories fell by 9.9 million barrels in the week ended July 5, blowing past expectations for a decline of 3.3 million barrels, which sparked a rally amid speculation demand is picking up as the world's largest economy improves.

The report also showed that total motor gasoline inventories decreased by 2.6 million barrels, confounding expectations for an increase of 1.2 million barrels.

Investors largely ignored bearish data out of China, the world's second largest consumer of crude.

China reported earlier that its exports fell 3.1% from a year earlier in June, confounding expectations for a 4.0% increase.

The country added that imports declined 0.7%, bringing the country's trade surplus to USD27.1 billion for the month, broadly in line with expectations for a surplus of USD27 billion.

Elsewhere, ongoing uncertainty in Egypt bolstered prices as well.

Less than a week after President Mohamed Morsi was kicked out of office, an interim government is setting a timetable for new elections, though fears unrest may disrupt the flow of oil through the Suez Canal added to the rally.

On the ICE Futures Exchange, Brent oil futures for August delivery were up 0.50% at USD108.35 a barrel, up USD2.53 from its U.S. counterpart.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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