Investing.com – Oil bulls have latched on to $50 WTI and have no intention of letting go, it appears.
Despite , WTI shot to new 2019 peaks above $52. Brent also made new intraday highs above $61.
By 12:06 PM ET (17:06 GMT), New York-traded was up $2.40, or 4.8%, at $52.18 per barrel after a 2019 high at $52.58.
London-traded, the global benchmark for crude, was higher by $2.47, or 4.2%, at $61.19, after rallying to $61.58 earlier.
WTI has gained 24% since hitting 18-month lows of $42.36 hit on Christmas Eve. But U.S. inventory data might not be supportive enough for prices in the long run.
The U.S. Energy Information Administration released bearish oil and product inventory numbers for the week ended Jan 4. The EIA said U.S. fell by 1.68 million barrels last week, about a third less than the 2.4 million-barrel draw forecast by analysts.
On the products side, rose by 8.07 million barrels, more than double the expected build of 3.39 million barrels. They were also 8% above the 5-year average, the EIA said.
, which include diesel and , increased by 10.61 million barrels, compared to forecasts for a gain of 1.89 million. They were also 5% above the 5-year average.
“The products build is crazy,” Tariq Zahir of the oil-focused Tyche Capital Advisors in New York said.
“This rally over the last several days is beyond its last legs in my opinion,” added Zahir, who typically has a bearish outlook on crude.
John Kilduff, founding partner at New York energy hedge fund Again Capital, agreed.
“Refiners continue to operate at a high level, but they appear to be playing to an increasingly empty theater, in that,demand and export levels continue to be lackluster, especially for gasoline,” Kilduff said.
“Crude oil imports remain on the high side and exports ticked down, again. With demand production holding near 11 million bpd, the overall crude oil supply is keeping up with the high demand from refiners,” he added.
The EIA said refiners operated at 96.1% of capacity last week, the first full working week of 2019. In months past, refinery utilization has also come close to 99%. If that happens and demand for products do not pick up, there could be even more inventory buildup.
Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Source: Investing.com
