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US WTI oil trading near $97, weak supplies push prices to 3 month high

US WT oil futures open Wednesday’s trading session back around $97 a barrel as weak oil supply data out of the US helped push American oil prices back to a 3 month high.

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US Light crude oil futures for December 2011 delivery was trading at $96.84 a barrel, 07.15 GMT this morning in electronic trading on the NYMEX. The contract registered $97.31 a barrel earlier this morning.

Weekly US Oil Data

The US API (American Petroleum Institute) released its own industry measurements late on Tuesday, finding a build of 148,000 barrels in crude oil stocks, a drop of 1.5 million barrels in petrol, a drop of 2.9 million barrels in distillates and a run rate reduced to 81.7 percent of capacity.

“People are looking for a drop in supplies, and that’s pushing the market higher. You also have a general increase in risk appetite again.” said Matt Zeman, market strategist at brokerage Kingsview Financial.

Meanwhile, crude oil demand has continued to increase in the developing world, with the US EIA reporting on Tuesday that Chinese oil demand is expected to have risen 7.5 percent in 2011.

“What’s really giving the market a jolt right now is that China has been a huge buyer recently of diesel fuel.” said James Cordier, a portfolio manager.

US Oil Back at $100?

Ritterbusch and Associates said it expects WTI oil prices to rise as high as $102 and Brent to make a run at $120. “The majority of event type items currently available to the oil complex appear to be tilted in a bullish direction.” the firm said.

“The market continues to show some resilience here. There’s not enough negative information to drive it back from the three month highs. The market has had an upward bias since we held $90 last week, while there’s a cloud over the market, it seems to be pointed higher.” according to Tradition Energy broker Gene McGillian.


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