Today’s closing price represents a 2016 high for WTI oil prices
Oil prices hit 2016 highs today, with U.S. crude benchmark WTI settling above $50 per barrel for the first time since July 21, 2015, when WTI closed at $50.36, the same closing price seen today. Concerns over unplanned supply interruptions in Nigeria, along with an expected crude oil storage draw in the U.S. Wednesday, have helped bolster crude oil prices ahead of the DOE inventory report.
The American Petroleum Institute expects a drawdown in Department of Energy reports this week, and a poll conducted by Reuters shows an expected stock draw of 2.7 MMBO last week.
WTI has rallied over the last two days after rebels in Nigeria’s Niger Delta attacked crude oil pipelines in the country. The group has vowed to bring crude oil production in Africa’s largest producer down to zero as they look to undermine the government.
“The market remains concerned about unscheduled supply interruptions with the latest coming from additional shut-ins in Nigeria,” said Dominick Chirichella, senior partner at the Energy Management Institute in New York.
“With the industry projecting a decline in total U.S. crude oil stocks in this week’s reports, the market bears are remaining on the sidelines.”
The EIA continues to expect U.S. production to fall in 2016 and 2017 despite higher prices, however. Production will fall 830 MBOPD this year and 410 MBOPD next year, the agency said in its Short-Term Energy Outlook.
