The crude price extended recent gains following supply data from the American Petroleum Institute (API). The week’s first inventory report last night said crude oil and gasoline stockpiles declined last week, while distillate inventories increased.
As the oil price continues to receive support from the rallying equity market and a weak US Dollar, crude futures neared $76 per barrel earlier today before falling back around lunchtime. On London’s Intercontinental Exchange the WTI front month crude future is trading just below $75.
The rally has largely been sentiment based with more than a little help from the persistently weak US Dollar. Both the International Energy Agency (IEA) and the Organization of Petroleum Exporting Countries (OPEC) have upgraded their demand outlook.
Some analysts and market commentators have pointed to the potential for a better-than-expected seasonal increase in demand in the run up to the Christmas holidays. The apparent progress of the economic recovery has led to heightened expectations of crude oil and gasoline consumption into the year end.
With the API report suggesting a decline in the US Crude stockpiles from the highest levels seen since the Eighties, investors will now focus their attention on the primary inventory report from the US Department of Energy later today. Investors will be keen to what impact the increased demand is likely to have.
All major oil and gas stocks were in the red in early trade. BP (LSE: BP) was down marginally, while fellow supermajor Shell (LSE: RDSB) lost 1.1%. BG Group (LSE: BG) also posted marginal declines.
Cairn Energy (LSE: CNE) was at the bottom of the pile with a decline of 2.3%. Petrofac (LSE: PFC) also lost more than 2%, while Tullow Oil (LSE: TLW), whose well in the Jubilee field in Ghana intersected an oil pay, moved down 1.5%.
Mid caps also were in decline. Dana Petroleum (LSE: DNX) lost 2%, while Heritage Oil (LSE: HOIL) pulled back 1.2%. Dragon Oil (LSE: DGO) declined less than 1%.
Atlantic Canada operating oil and gas group Enegi Oil (AIM: ENEG) continue to build on this months recent strength, advancing over 8%. Petro Matad Ltd (AIM: MATD) and Africa and FSU operating Victoria Oil & Gas (AIM: VOG) also moved against the tide, advancing 6% and 4% respectively. Similarly Leni Oil & Gas (AIM: LGO) gained 3%.
South American Focused explorer Pan Andean Resources (AIM: PRE) and Peru, Colombia and Cuba operating oil and gas explorer and producer Gold Oil (LSE: GOO) and Iraq and Algeria operating Gulf Keystone Petroleum (AIM: GKP) declined 2.5%.