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Oil prices achieved significant gains yesterday for the second day running, Brent climbing to as high as $67 per barrel and WTI to $61 per barrel. As such, Brent has almost entirely recouped the sizeable losses it recorded at the beginning of the week. WTI is already up week-on-week. The again somewhat weaker US dollar is giving oil prices a boost. Wednesday's inventory report from the US Department of Energy is also continuing to drive up prices as it showed declining stocks of crude oil and oil products.
According to Genscape, crude oil stocks at Cushing allegedly decreased by an additional 740,000 barrels between Friday and Tuesday. What is more, oil production in the North Sea could be hampered by a strike among oil workers on British oil rigs - they intend to vote on whether to go out on strike. A strike by Norwegian oil workers in July 2012 resulted in a temporary 15% drop in Norwegian oil production, which helped at the time to drive the Brent price up by 10%.
We could see profit-taking today ahead of the long weekend - markets in the US, Great Britain and continental Europe will be closed on Monday for public holidays. That said, Commerzbank do not anticipate any more significant selling pressure due to the aforementioned factors which, although at first glance seeming to imply that supply is tightening, in fact do nothing at all to change the overall picture of a significantly oversupplied market. Analysts envisage downside risks for oil prices in the run-up to the OPEC meeting that will be taking place in two weeks' time.
