Commodities: Oil rebounds as WTI soars on US inventory data
Updated : 17:54
Oil futures spiked on Wednesday after an unexpectedly large fall in US crude inventories sent both benchmarks higher, with the spread premium inverting in WTI’s favour.
At 1642 GMT, the Brent front-month futures contract was up 2.88% or $1.04 to $37.15 per barrel, while WTI rose 3.68% or $1.33 to $37.47, as the spread between both futures contracts was initially wiped out and subsequently turned into a premium in favour of WTI; only the fourth such occurrence since 2010.
Earlier, the US Energy Information Administration reported crude oil inventories fell by 5.9m barrels in the past week, compared with analysts' expectations for an increase of 1.1-1.3m barrels, lending support to oil futures.
Crude stocks at the US delivery hub of Cushing, Oklahoma rose by 2 million barrels, the EIA added.
Jasper Lawler, analyst at CMC Markets, said, “Less than a week after the US Congress agreed a deal to lift the ban on US exports, the price of front-month WTI futures, the benchmark for US crude oil briefly rose to a premium over Brent, the international benchmark. The spread between Brent and WTI reached parity without any US export deals being signed.”
Base metals also had a positive session with most futures contracts on the up. The three-month copper delivery futures contract was up 0.3% to $4,703.00 per metric tonne in late afternoon trading on the London Metal Exchange. Additionally, primary aluminium (up 1.8%), lead (up 0.8%) tin (up 0.7%) and zinc (up 1.7%) futures also traded higher. Only nickel (down 0.7%) bucked broader market positivity.
Elsewhere, the precious metals uptick came to a grinding halt with the COMEX gold futures contract posting a decline of 0.50% or $5.20 to $1,068.90 an ounce, while spot gold was 0.25% or $2.66 lower at $1,069.77 an ounce. Away from gold, COMEX silver fell 0.20% or three cents to $14.29 an ounce, while spot platinum fell 0.42% or $3.64 to $867.69 an ounce.
Finally, agricultural commodity futures were on a mixed patch in early trading stateside. CBOT corn (down 0.27%), and ICE cotton (down 0.46%) futures headed lower, while ICE cocoa (up 2.00%), CBOT wheat (broadly flat) and CME live cattle (up 2.07%) contracts were in positive territory.