Indore, April 27, 2016 (Newswire.com)
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Commodity Tips: SINGAPORE: Crude oil futures rose half a $ in early Asian trading on Wednesday and remained near 2016 highs on the back of strong investor sentiment and a weak $, although analysts warned this month’s bull-run could soon run out of steam.
Global Brent crude futures were trading at $46.26 per barrel at 0023 GMT, up 52 cents, or 1.1%, from their previous settlement.
U.S. West Texas Intermediate (WTI) crude was also up 52 cents, or 1.2 percent, at $44.56 a barrel.
WTI was further lifted after the American Petroleum Institute (API) reported a drawdown of nearly 1.1 million barrels in United State crude inventories last week versus a 2.4 million-barrel build expected by analysts in a Reuters poll.
Both Brent and WTI were near 2016 highs of 46.49 Dollar and 44.83 Dollar, respectively reached the previous session.
Apart from strong investment appetite from financial traders, analysts said crude was receiving support from a falling dollar, which has shed 5 percent in value against a basket of other leading currencies since the beginning of the year.
A weak $, in which crude is traded, makes fuel imports reasonable for countries using other currencies at home, potentially spurring need.
“A weaker United State $ and expectations of stronger fundamentals drove crude oil cost higher. Sentiment continues to improve, with major producer BP indicating the markets may re balance by the end of the year,” ANZ bank said on Wed.
But the bank advised that the steep gains seen this month might “test investors’ bullish resolve this week.”
With cost up by approximately a quarter this session and by over 2-3rd since their 2016 lows, traders with long positions at some point will be desirous to sell and lock in the profit.