Some of the Reasons for the Price Increase for a BBL of Oil
Oil prices are drawing attention on Wednesday and that wasn’t for nothing.
The price of West Texas Intermediate crude CLQ3 +1.90% topped $105 a barrel, a level not seen in more than a year, while London’s Brent crude UK:LCOQ3 +0.38% contract topped $108 a barrel, which hasn’t happened since earlier this year.
The trigger appears to be supply data, which showed crude supplies dropping by double what analysts expected. Price Futures Group analyst Phil Flynn summed it up:
“This is a big shock. While most were looking at another drawdown in supply, no one expected this drop.”
Oil also got a boost from a big China trade data miss, which some say could provoke some policy easing out of China, a country whose growth engine is already sputtering. Oil likes growth, and especially China growth. But the other big driver for oil has been continuing political tension in Egypt, which controls the Suez Canal — a key chokepoint for producers.