Oil price trend 'impossible to pin down'

A trend in oil prices is currently proving difficult - and perhaps even "impossible" - to pin down.

The Wall Street Journal says that key benchmarks "retreated" from one-month highs today, after the latest report from the US energy watchdog revealed crude oil supplies in the US hit a record high and production unexpectedly increased.

Energy Information Administration data showed "total commercial supplies of crude oil and petroleum products rose by 2.3 million barrels last week to 1.3 billion barrels, a record high in data going back to 1990".

US shale production, which has been falling from highs reached in the spring, also jumped from nine million barrels a day to 9.2 million barrels, bucking a recent downward trend that had given hope a supply glut was softening.

Brent, the global benchmark, fell 1.1 per cent to $51.33 a barrel on the ICE Futures Europe exchange, while the US benchmark, West Texas Intermediate, fell 1.5 per cent to $47.81 a barrel on the New York Mercantile Exchange.

The Journal notes that a surge in oil prices so far in October has been driven by statistics showing falling production and steady drawdown on US supplies, with forecasts on Tuesday suggesting this pattern had continued last week.

That official figures now show otherwise emphasises the "conflicting" picture in different bodies' projections that is making reliable trends  "difficult - or sometimes impossible - to pin down".

FastFT adds that oil was heading up modestly again on Thursday morning in Europe - Brent edged up to $51.90 - despite there being "little in the way of concrete news to shape the price so far".

It says the call by some traders that the rise in recent weeks shows we have hit a "bottom" in prices could be premature, saying "those of a more bearish disposition will point out that calling the bottom has proved a treacherous exercise this year".

Even if oil does now have a floor, it will need to record a substantial rise before prices hit a level that alleviates the pain on producers, many of whom are currently making losses on output.