Oil Climbs Ahead of Stockpiles Report

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Oil Climbs Ahead of Stockpiles Report

Global oil prices soared on Wednesday before announcement of the latest US supplies report, which would provide hints about demand on the world’s number one consumer.

October-delivery Brent North Sea crude increased 10 cents to $102.60 per barrel in late morning London trade.

US benchmark Western Texas Intermediate for settlement in October added 24 cents to $94.10 per barrel.

The US government’s Department of Energy is expected later on Wednesday to publish the official report on petroleum inventories for the week to August 22.

Analysts surveyed by Dow Jones Newswires predict that crude oil stockpiles have declined by 900, 000 barrels on average. Gasoline reserves are estimated to have dropped by one million barrels and distillates, such as heating oil and diesel, are projected to have slid by 600,000 barrels.

A plunge in US inventories is usually a suggestion of solid demand in the world biggest economy, propping world prices, according to Yahoo News.

Investors are monitoring geopolitical conflicts around the world.

The US government announced on Tuesday that the United Arab Emirates and Egypt have bombed several Islamic forces positions in Libya, an oil producer.

Ukrainian President Petro Poroshenko held discussions with his Russian counterpart Vladimir Putin in Belarus regarding heavy fighting in east Ukraine as Moscow admitted for the first time that its soldiers had crossed into its neighbor’s territory.

Ukraine is an important route for shipment of Russian gas to Europe.

“The Energy Administration figures are a possible market mover. Geopolitical risk is back in play, simply because the market has stripped a lot of the premium out of pricing, making it vulnerable to any negative news,” Rick Spooner of CMC Markets in Sydney told Bloomberg by phone.

Hostilities in Iraq, the second-biggest oil exporter in the Organization of Petroleum Exporting Countries, has not affected oil facilities in the south, where about 75% of its crude output comes from.

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To contact the reporter of this story; Jonathan Millet at john@forexminute.com