Crude Oil Prices Cruise Past $93 a Barrel

Crude oil futures continued on a relentless march higher yesterday, rising for the fourth straight session to a hit a new settlement high above $93 a barrel. The temporary closure of some Mexican oil production and a weaker dollar were the latest factors to push prices higher.The front-month December light, sweet crude contract on the New York Mercantile Exchange rose $1.67, or 1.8%, at $93.53 a barrel, the highest-ever settlement for a front-month contract, after earlier rising to a new intraday record $93.80. Brent crude on the ICE futures exchange rose $1.51 to $90.23 a barrel after hitting an intraday record $90.49. “The feeding frenzy is immense; any bearish news is being totally ignored, while bullish news is magnified 10-fold,” the senior vice president at brokerage Macquarie Futures USA, Nauman Barakat, said. “This is probably going to continue until Wednesday,” when the U.S. Energy Department releases weekly inventory statistics and a decision on American rates is due.Stormy weather has shut all three of Mexico’s Gulf of Mexico oil export harbors and state-owned Petroleos Mexicano, or Pemex, said it has taken 600,000 barrels a day of production off line. Pemex said it will have to wait for the ports to open before it restarts production because it has run out of storage capacity. While the lost production will likely be made up fairly quickly, it is bound to have an effect on American inventory levels in coming weeks, which could further support prices. Crude is up 10% since Wednesday, when the DOE said in its weekly inventory report that stockpiles fell, contrary to analysts’ expectations for a build.“The Pemex closure is being overplayed a little by the market, but it will have an effect on crude imports, possibly in next week’s, or following week’s data,” the president of trading advisory firm Ritterbusch and Associates in Galena, Ill., Jim Ritterbusch, said.Analysts are expecting the DOE to report a small increase in crude oil stockpiles for last week in data due 10:30 a.m. Wednesday, according to a Dow Jones Newswires survey of analysts. Crude stocks are seen growing by 100,000 barrels, based on the average of analysts’ forecasts. Gasoline stockpiles are seen falling by 400,000 barrels, and distillates, which include heating oil and diesel fuel, are seen falling by 1 million barrels. Refinery use is expected to have increased by 0.5 percentage point to 87.6% of capacity.Traders will also focus on a Federal Reserve announcement on interest rates due Wednesday. The Fed is expected to cut rates by a quarter percentage point, which would be negative for the dollar and is seen as positive for crude oil demand. A bigger-than-expected cut would send prices soaring higher, while no cut at all would likely cause a sell-off.

Crude Oil Prices Cruise Past $93 a Barrel

Crude Oil Prices Cruise Past $93 a Barrel

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