U.S. West Texas Intermediate crude oil futures posted a volatile two-sided trade this week before moving to within striking distance of its three-year high on Thursday. One catalyst behind the price action this week was the U.S. Dollar since it also posted a volatile two-sided trade.
Additional factors affecting the price action were the U.S. Energy Information Administration’s (EIA) weekly inventories report and a survey on OPEC’s commitment to its program to cut production.
At the start of the week, crude oil futures were pressured by a firmer U.S. Dollar which rose because of rising U.S. Treasury yields. Dollar-denominated crude oil retreated because a stronger dollar tends to reduce demand for oil priced in dollars.
Prices reached their low for the week on Wednesday despite the EIA report that showed U.S. crude inventories rose by 6.8 million barrels during the week-ending January 26, after 10 straight weeks of declines. Analysts had expected a decrease of 126,000 barrels.
The EIA report went on to say that gasoline stocks unexpectedly fell by 2 million barrels, compared with expectations for a gain of 1.8 million barrels, helping to drive up gasoline futures.
Additionally, the EIA report went on to say that distillate stockpiles fell by 1.9 million barrels, versus expectations for a 1.5 million-barrel drop, the EIA data showed.
The major news revealed in the EIA report was that U.S. crude oil production in November surpassed…