Oil hits fresh 3.5-year high in Asia
- Oil remains bid as US stockpiles dropped in the week ended April 13.
- The recent rally is fueled by geopolitical tensions and fears of supply disruptions.
Oil prices rose to their highest level since late 2014 in Asia as traders factored in a drop in the US oil inventories in the week ended April 13.
Brent oil rose to a 3.5-year high of $73.96 and was last seen trading at $73.76/barrel.On similar lines, WTI front-month contract hit a high of $68.95 before retreating slightly to $68.70.
US commercial oil inventories dropped by 1.1 million barrels in the week through April 13, according to the US Energy Information Administration (EIA). Meanwhile, gasoline stocks fell by 3 million barrels and distillate fuels, including diesel, declined by 3.1 million barrels.
Also, the involvement of Russia and Iran (two of the biggest oil producers) in the Syrian crisis and the fears of supply disruptions seem to have played a major role in boosting oil prices in recent weeks.
What's more, the rumors are doing the rounds that Saudi Arabia is hoping to push oil prices to $80, so the valuation of Saudi Aramco improves. Further, the OPEC output cuts deal compliance rate hit a new record high of 164 percent in March.
So, it appears, there is no stopping the oil rally, at least in the short-run.
Author
Omkar Godbole
FXStreet Contributor
Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.
