Oil Settles at $47.63/barrel on Intense Market Rally

Oil prices inched up about 2 percent on Thursday, September 22, rallying for a second day after a surprise U.S. crude inventory plunge and ahead of talks next week between OPEC and other oil producers on curbing oversupply, CNBC reports.
Oil has rallied since Wednesday’s report by the U.S. Energy Information Administration that crude stockpiles fell 6.2 million barrels last week, versus market expectations for a build of 3.4 million barrels. U.S. crude stocks have fallen by an unexpected 21 million barrels this month so far.
Brent crude futures rose 80 cents, or 1.71 percent, to $47.63 a barrel. U.S. West Texas Intermediate crude futures were up 95 cents, or 2.1 percent, at $46.29 a barrel by 2:38 p.m. ET. Week-to-date, WTI was up about 8 percent for its largest weekly advance in a month.

WTI’s discount to Brent was at its smallest since early August, reflecting the improved fundamentals for U.S. crude.

Oil got an additional lift from a drop in the dollar to its lowest against the yen in four weeks after the U.S. Federal Reserve kept monetary policy unchanged and signaled rates may rise more slowly than it had previously expected.

A weaker dollar makes energy imports cheaper for oil-reliant nations while low U.S. rates mean credit will remain easier to come by.

Even so, energy monitoring service Genscape reported on Thursday a build of about 213,000 barrels at the Cushing, Oklahoma delivery base for WTI futures for the week ended Sept. 20, traders said.
Cushing inventories are an important component of total U.S. stockpiles. The Genscape report, coming on top of a build of 526,000 barrels at Cushing reported by the EIA for the week ended Sept. 16, suggested that total U.S. stockpiles may start climbing again soon.

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