Crude prices climbed to a 12-week high in New York today on declining stockpiles at a U.S. storage hub. Rising as much as 3.7% today, oil futures erased this year’s losses.
Supplies in Cushing, Oklahoma, the delivery point for West Texas Intermediate crude — the grade traded in New York — fell last week. Brent oil in London, normally priced around $25 more per barrel than WTI, traded at the lowest premium to West Texas crude since July.
“Cushing stockpiles have been coming down for a while now and everyone seems to have just noticed and begun trading on it,” said Adam Sieminski, chief energy economist at Deutsche Bank (NYSE:DB) in Washington. “Brent is still over $110, so it’s safe to say WTI is still under-priced and could move higher.”
December crude rose 2.22% to $93.33 a barrel as of 3:00 p.m. today on the New York Mercantile Exchange. The contract rose as high as $94.65, its highest since August 2. Futures have rallied 24% since October 4.
Crude oil for December delivery increased $2.50, or 2.7 percent, to $93.77 a barrel at 1:14 p.m. on the New York Mercantile Exchange. The contract touched $94.65, the highest level since August 2. Futures have rallied 24 percent since October 4. The common definition of a bull market is a gain of 20%.
Meanwhile, Brent oil for December delivery declined 38 cents to $111.07 a barrel on the London-based ICE Futures Europe exchange.
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Oil in New York may soon extend gains above its 200-day moving average of $94.76. Futures last closed above that technical signal on July 29. “We’re just below the 200-day moving average and could easily exceed it for the first time since the end of July,” said Addison Armstrong, director of market research at Tradition Energy in Stamford, Connecticut.