AIRLINK 62.48 Increased By ▲ 2.05 (3.39%)
BOP 5.36 Increased By ▲ 0.01 (0.19%)
CNERGY 4.58 Decreased By ▼ -0.02 (-0.43%)
DFML 15.50 Increased By ▲ 0.66 (4.45%)
DGKC 66.40 Increased By ▲ 1.60 (2.47%)
FCCL 17.59 Increased By ▲ 0.73 (4.33%)
FFBL 27.70 Increased By ▲ 2.95 (11.92%)
FFL 9.27 Increased By ▲ 0.21 (2.32%)
GGL 10.06 Increased By ▲ 0.10 (1%)
HBL 105.70 Increased By ▲ 1.49 (1.43%)
HUBC 122.30 Increased By ▲ 4.78 (4.07%)
HUMNL 6.60 Increased By ▲ 0.06 (0.92%)
KEL 4.50 Decreased By ▼ -0.05 (-1.1%)
KOSM 4.48 Decreased By ▼ -0.09 (-1.97%)
MLCF 36.20 Increased By ▲ 0.79 (2.23%)
OGDC 122.92 Increased By ▲ 0.53 (0.43%)
PAEL 23.00 Increased By ▲ 1.09 (4.97%)
PIAA 29.34 Increased By ▲ 2.05 (7.51%)
PIBTL 5.80 Decreased By ▼ -0.14 (-2.36%)
PPL 107.50 Increased By ▲ 0.13 (0.12%)
PRL 27.25 Increased By ▲ 0.74 (2.79%)
PTC 18.07 Increased By ▲ 1.97 (12.24%)
SEARL 53.00 Decreased By ▼ -0.63 (-1.17%)
SNGP 63.21 Increased By ▲ 2.01 (3.28%)
SSGC 10.80 Increased By ▲ 0.05 (0.47%)
TELE 9.20 Increased By ▲ 0.71 (8.36%)
TPLP 11.44 Increased By ▲ 0.86 (8.13%)
TRG 70.86 Increased By ▲ 0.95 (1.36%)
UNITY 23.62 Increased By ▲ 0.11 (0.47%)
WTL 1.28 No Change ▼ 0.00 (0%)
BR100 6,944 Increased By 65.8 (0.96%)
BR30 22,827 Increased By 258.6 (1.15%)
KSE100 67,142 Increased By 594.3 (0.89%)
KSE30 22,090 Increased By 175.1 (0.8%)

LONDON: Oil prices rose for a fifth day on Wednesday, supported by a drop in US inventories and investor expectations that the US Federal Reserve will lower borrowing costs for the first time since the financial crisis more than a decade ago.

Brent crude futures, the international benchmark for oil prices, were up 42 cents, or 0.6%, at $65.14 a barrel by 1105 GMT.

US West Texas Intermediate crude gained 40 cents, or 0.7%, to $58.45 a barrel.

For the month, however, both contracts were set to decline due to worries about oil demand, with Brent down 2.1% and WTI 0.03% lower.

Central bankers in the United States began their two-day meeting on Tuesday and were expected to reduce interest rates, with President Donald Trump having reiterated his call for the Fed to make a large cut.

"The move has long been anticipated and represents a double boon for oil prices - on one hand it should encourage US oil demand and on the other it will apply downward pressure on the dollar," PVM Oil Associates analyst Stephen Brennock said.

Oil stockpiles fell again last week, along with gasoline and distillate inventories, data from the American Petroleum Institute showed on Tuesday.

Crude inventories fell by 6 million barrels to 443 million barrels in the week ended July 26, against a forecast for a drop of 2.6 million barrels in a Reuters poll of analysts.

"The outlook for another draw in US crude inventories and renewed outages in Libya are supporting oil prices," UBS oil analyst Giovanni Staunovo said.

Libya's Sharara oilfield, the country's largest, shut on Tuesday after a problem with a valve on the pipeline linking it to the Zawiya oil terminal.

Backwardation in Brent has to a large extent evaporated, signalling a well-supplied market despite OPEC-led production cuts and US sanctions on the energy sectors of Iran and Venezuela.

Backwardation is a market structure in which prompt prices are higher than forward prices.

Tensions in the Middle East remain high, providing another bullish catalyst for prices, with the United States formally asking Germany to join France and Britain to help secure the Strait of Hormuz after the seizure of a British tanker by Iran.

Market participants are also closely watching the US-China meeting in Shanghai as both countries seek to end a year-long trade war, though expectations for progress are low.

China's factory activity shrank for a third month in July, underlining the strains placed by the trade war on the world's second-biggest economy and one of the top oil consumers.

Copyright Reuters, 2019

Comments

Comments are closed.