Crude Oil Began February With 2% Rally

Some analysts hypothesized that binding supplies and growing demand in the United States were the cause of crude rally. The USA’s winter fuel demand following New York and the neighboring region got slapped with the most severe snowstorm in recent years. Last week, the Energy Information Administration announced that US inventories of crude oil fell by 9.9 million barrels rather than increasing by 1.6 million barrels as analysts had foretold.

The different possible causes for the increasing prices were the oil production cuts from the OPEC+. Saudi Arabia made last month a unilateral commitment to cut its output by 1 million barrels per day, and the cuts take impact started on Monday. As stated in reports, the OPEC+ owns approximately 99% compliance with the production cut deal.

The Commitment of Traders

Not each bit of news was on the right side for crude, however. Published on Friday, Baker Hughes’s report exposed that US oil companies raised the number of oil rigs by 6 to 295 — the most distinguished level after May.

That stated, analysts assert that the number was still too little to influence US output majorly. The number of gas rigs persisted stable at 88.

The Commitment of Traders release from the Commodity Futures Trading Commission pointed that hedge funds and money managers trimmed their net long positions on crude last week. The number of long posts on NYMEX light sweet crude oil declined by 816, while the number of short positions developed by 7,652.

Futures for delivering WTI crude oil in March surged by $1.35 (2.59%) to $53.55 per barrel as of 22:27 GMT on NYMEX on Monday. In April, Brent crude for delivery soared by $1.29 (2.34%) to trade at $56.33 per barrel on ICE. March’s record for natural gas surged as much as $0.29 (11.15%) to $2.85 per million British thermal units on NYMEX.