Oil Prices increased Wednesday, but Shell is not expecting a recovery anytime soon. Lower inventories and oil production in US petroleum supply caused a spike on oil prices Wednesday, but giant oil company Shell admitted it will still take longer before any recovery.
Channel News Asia writes the US benchmark West Texas Intermediate for October delivery increased by almost six percent, which is $2.56, bringing the price to $47.15 a barrel on the New York Mercantil Exchange. Meanwhile, in London, European benchmark Brent oil for November delivery spiked $2 to $49.75 a barrel. The US Department of Energy reported a 2.1 million-barrel decline in investors.
Meanwhile, at the Cushing, Oklahoma trading hub, a there was a reported 1.9 million-barrel decrease. Mizuho Securities director of the futures division Bob Yawger said this decline indicates production "is being lost in the US." US oil production went down for the sixth consecutive week. It went down by 0.2 percent, which is translated to 18,000 barrels per day.
Despite the slight increase in oil prices, companies are still not optimistic with its recovery.
According to The Week, leading oil company Shell admitted that it will take longer for the oil prices to recover, and predicting when it will happen is hard.
Last Tuesday, the West Texas Intermediate closed higher After President Obama said no on the US House of Representative's move to repeal the ban on export of crude oil. White House spokesman Josh Earnest said, ""This is a policy decision that is made over at the Commerce Department, and for that reason, we wouldn't support legislation like the one that's been put forward by Republicans."
Some say that the market is less concerned about the short-term supply movement. There are some who argues that the market is driven by the looming Federal Reserve interest rate hike. In fact, one of the reasons why the oil price went up was the fall in the dollar.
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