Oil Rises After US Stocks Grow Less Than Expected

West Texas Intermediate gained for a second day after an Energy Information Administration report showed growth in U.S. inventories slowed. Brent climbed.

Stockpiles rose 2.06 million barrels in the seven days ended Oct. 24, following a combined increase of 21 million in the previous three weeks, the EIA said. Refineries reduced their operating rate by 0.1 percentage point. Brent touched a two-week high after OPEC’s Secretary-General said the recent plunge in prices doesn’t reflect the balance between supply and demand.

“Crude may be establishing a floor here on a short-term basis,” said Tom Finlon, Jupiter, Florida-based director of Energy Analytics Group LLC. “Refinery utilization rates are probably at their nadir. Inventories will stop building by a dramatic amount simply due to the fact that refineries will start consuming more.”

WTI for December delivery rose $1.21, or 1.5 percent, to $82.63 a barrel at 12:29 p.m. on the New York Mercantile Exchange. The volume of all futures was 16 percent below the 100-day average.

Brent for December settlement gained $1.52, or 1.8 percent, to $87.55 a barrel on the London-based ICE Futures Europe exchange. The contract reached $87.94, the highest intraday price since Oct. 14. Volume was 14 percent below the 100-day average.

via Bloomberg

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza