Oil prices increase only a flash in the pan as U.S. announces high oil supply - Insane Visions

Oil prices increase only a flash in the pan as U.S. announces high oil supply

oil prices

A slight increase on oil prices reported on Thursday in Asia didn’t stop oil companies to express their worries over U.S. stockpiles and over the resurrection of exports of Iranian oil.

After a week long break, Chinese traders returned to work and, as was expected, oil prices started going up. According to The Wall Street Journal, on the New York Mercantile Exchange, light, sweet crude futures for delivery in November traded at $47.98 a barrel at 0334 GMT, up $0.17 in the Globex electronic session. November Brent crude on London’s ICE Futures exchange rose $0.15 to $51.48 a barrel.

The price increase comes as a surprise for many companies

Even a slight increase on oil prices after a six-years low on late August meant so much for oil companies. But then came the bad news: Energy Information Administration announced that U.S. crude stocks added 3.1 million barrels in the week ended Oct. 2, double than it was expected.

“At 461.0 million barrels, U.S. crude oil inventories remain near levels not seen for this time of year in at least the last 80 years,” said EIA, states The Wall Street Journal. As if this weren’t enough bad news for those who hope that oil prices will continue to grow, speculations on resumption of exports in Iran are likely to turn into reality, probably as soon as next month.

Russia will discuss the prices

It looks like consistent oversupply will still “feed” this price war. But little hope is on the way. Earlier this week, Russia Energy Minister Alexander Novak had said his country was prepared to meet with members and nonmembers of the Organization of the Petroleum Exporting Countries to discuss the oil prices and market situation, if such a meeting were to take place. It’s not much, but for some oil company executives this was enough to express optimism about the health of the sector.

Andrei

A finance and tech news journalist with a passion for entrepreneurship and business. Feel free to message me on Twitter and Facebook.