US crude futures advanced on Tuesday as anticipation of soaring stockpiles were overwhelmed by reports that Cushing inventories were approaching minimum levels. Brent dropped as improving Libyan supplies offset the Ukraine crisis.
US commercial crude stocks were estimated to have reached a record high for the third week in a row, and an increase above 400M bbls for the first time was thought possible, Reuters reported.
However, inventories at the Cushing, Oklahoma supply hub for US Crude have declined in the last three weeks as recent infrastructural enhancements have seen bottlenecks ease at the central delivery point. The stocks declined to 25.4 million barrels in the week that closed on April 25.
While there was little to report about eastern and southern parts of Ukraine on Tuesday, the most severe bloodshed since the tensions commenced has re-shaped the conflict, with both pro-Russian separatists and supporters of a united Ukraine hardening positions and accusing each other of splitting the country.
Higher Libyan shipments have impacted on global prices in recent weeks despite the fact that the critical southern El Sharara oilfield is yet to be reopened and new protests had the Zultun and Raquba oilfields shut.
“Historically, the minimum operating inventory level has been in the neighborhood of 20 million barrels, and we are approaching the minimum. It’s supportive for front-month WTI. It would have a tendency to narrow the price differential with Brent,” economist James Williams of London-based WTRG Economics told Bloomberg by phone.
The per-barrel price of June settlement WTI surged 39 cents or 0.4% to $99.87 as of 1:54 pm on the New York Mercantile Exchange. It had earlier hit the $100.42 mark. The amount of all futures traded was higher than the average for the last 100 days by 9.6%.
Brent for June delivery lost 42 cents or 0.4% to trade at $104 per barrel on the ICE Futures Europe exchange in London.
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