Oil prices extended their gains at the start of Wednesday’s Asian session after the U.S. government slashed its crude production expectations for next year and fuel inventories declined. U.S. WTI futures were up 1.58 percent at 10:30 a.m. HK/SIN, trading at $45.75 per barrel. Brent crude futures were up 1.33 percent to $48.15 per barrel.These early gains came after 1.4 percent gains on Tuesday.
On Tuesday, the American Petroleum Institute (API) noted that U.S. crude oil inventories were down by 8.1 million barrels, bringing the stockpiles to 495.6 million barrels, a number which may indicate that the current supply gut is beginning to recede. The U.S. Energy Information Administration contributed to the encouraging outlook by reducing its production forecasts for 2018 to a production increase of 570,000 barrels per day, down from June’s forecast of 680,000 barrels per day. With the latest forecasts, 2018 crude oil output will be increased by 9.9 million barrels per day, breaking the record of 9.61 million barrels per day that was set in June 2015.
Dollar Under Pressure
The U.S. dollar was under pressure on Wednesday morning as traders reacted to the revelation that Donald Trump Jr. was willing to accept help from Russia to help his father, U.S. President Donald Trump, win last year’s presidential election. The junior Trump released his emails on Tuesday on Twitter after the New York Times announced its intention to write about them. The emails show that Donald Jr. was willing to accept sensitive information from a Russian attorney that sowed Russia’s support for Donald Trump.The emails are now being investigated by Congress and the Justice Department.
The dollar struggled against most of its primary trading partners, trading at $1.1477 against the euro and 113.62 against the yen, a 0.26 percent decline against the Japanese currency. The greenback was also down against the Australian dollar in early trade.
Traders are now looking to Federal Reserve Chair Janet Yellen’s announcement about the Fed’s monetary tightening policy to help the dollar find direction.
