HOUSTON – Crude oil has increased to around $40/bbl today, rallying after prices tumbled earlier this week.
Today, Brent is at $40.33/bbl, with WTI just shy of $40, landing at $39.41. The US benchmark dipped as low as $36/bbl just two days ago. Although not quite as severe, its European counterpart nonetheless mirrored the slide, trading at $38 on the same day.
In the last few days, several major global events aligned to contribute to these gains. The Wall Street Journal and other news organizations attributed the jump to the US Federal Reserve informed that it would maintain interest rates, and noted that both futures indices have gained more than 40% since the lows experienced in January.
Also adding confidence was another fiscal factor: UK Chancellor George Osborne offered several tax incentives to ease the pain on UK producers.
Yesterday’s news that OPEC will hold a mid-April meeting in Qatar to discuss plans of an output freeze also contributed to the positive movement.
In addition, the US Energy Information Administration announced that crude inventories in the US rose by more than 1 MMbbl last week. Yesterday, Reuters linked this news to the uptick in prices, pointing out that this level hit record highs for the fifth consecutive week.
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