United States (U.S.) West Texas Intermediate crude for November delivery rose $1.02, or two percent, to $51.68 a barrel, close to highs last seen in May. “The key to further upside is Brent staying over $56.65”. At Wednesday’ session, Brent and WTI were up about 16% for the third quarter – on track to their largest quarterly gain since 2004. Under Germany’s mixed-member proportional voting system, that vaults in well beyond the 5% threshold needed for seats in parliament.
Futures rose as much as 1.4 percent in London to the highest since February 2.
Merkel now needs to work to form a coalition reportedly without the SPD, a process that will likely involve protracted negotiations.
Earlier markets got a jolt when North Korean Foreign Minister Ri Yong Ho said on Friday he believes the North could consider a hydrogen bomb test on the Pacific Ocean of an unprecedented scale, South Korea’s Yonhap news agency reported.
As a result, the price of Brent Crude rose 3.8% to close at $59 a barrel, its highest level since July 2015, but has since continued to rise 0.3% to $59.2 a barrel in early morning trading.
Essam al-Marzouq, Kuwait’s oil minister and chair of the meeting of the Join Ministerial Monitoring Committee, said output curbs had helped cut global crude inventories to their five-year average, according to Reuters, which was Opec’s stated target. Over this time, the travails of petrostates led oil cartel OPEC and other oil-producing countries to eventually agree to do something about the supply glut.
The first, and most important, is that USA crude has to remain at a significant discount to similar grades, given the higher loading and shipping costs.
The fate of the deal after March 2018 will be discussed at a regular meeting in Vienna on November 30.
Elsewhere, in the USA, market participants mulled over data showing the number of oil rigs continued to decline, suggesting a possible tightening in domestic production.
However, the number of USA oil rigs operating, an indicator of future production, fell for the third straight week as a 14-month drilling recovery stalled as companies pared back on spending plans when crude prices were softer.
Among oil products, demand for middle distillates – diesel and jet fuel – has taken the industry by surprise.