Oil prices rise amid declining inventories

The lower CPI could lead to the Federal Reserve deciding to not raise interest rates this month.

The sources said the figures came from an updated mid-term strategy report discussed this week by representatives from the Organization of the Petroleum Exporting Countries (OPEC) in Vienna, which has yet to be fully endorsed by OPEC ministers.

Oil has fluctuated since slumping below $40 a barrel more than three weeks ago as concern about China’s growth fuelled volatility in markets.

Oil prices have plunged in the past year because of an oversupply of crude oil. Saudi Arabia, the US and Russian Federation are all pumping near-record volumes of oil. “Everything is up in the air because of tomorrow’s Fed announcement”.

“Shockingly, one (Fed) official thinks rates need to be cut, and not raised, before the end of 2015″.

USA benchmark West Texas Intermediate for October delivery jumped $2.56, or almost six percent, to $47.15 a barrel on the New York Mercantile Exchange.

Brent crude for November also swung to positive territory, gaining 14 cents to $49.89.

“WTI prices gained the most this month after the EIA reported stockpiles slipped 2.1 million barrels last week as refineries increased operating rates for the first time since July”.

The USA shale boom is likely to slow “considerably” on low oil prices, Fatih Birol, executive director at the global Energy Agency, said in an interview in Tokyo on Wednesday.

The USA crude production fell 18,000 barrels to 9.117 million barrels a day that week. “This is a result of higher refining activity and lower US crude production, which is helping the USA inventory glut to ease off”, Daniel Ang, analyst at Singapore brokerage Phillips Futures, said. United States oil data this week suggested the world’s biggest oil market may be beginning to tighten.

“Oil is caught between the upside that comes from a weaker dollar and the downside to demand from declining global growth”, said David Hufton at brokerage PVM. Every time the bull speculators managed to force the oil prices upward it has been extremely short lived and bunker prices returned back to price levels where they belong.