Why Did Oil Prices Rise This Morning?

Oil prices rose early today because of the oil workers’ strike in Kuwait. Here’s what you need to know.

Val Kensington - Author

Apr. 19 2016, Published 11:03 a.m. ET

uploads///wti cRUDE VS bRENT

Oil trades higher

Oil prices rose early today because of the oil workers’ strike in Kuwait. At 4:55 EST, crude futures for June delivery were trading at $41.47 per barrel, a gain of 0.68%. Brent crude for June delivery was trading at $43.24 per barrel, a gain of 0.77%.

Article continues below advertisement
Article continues below advertisement

Kuwait strike takes eyes off output freeze deal

The oil workers’ strike in Kuwait started on Sunday and resulted in a decline of more than 50% in the country’s oil production to 1 million barrels per day. You should also note that Kuwait’s average daily oil output in March was 2.7 million barrels. On Monday, crude oil prices fell almost 7% as the output freeze deal didn’t materialize in the producers’ meeting in Doha on Sunday.

Even though the oil market started lower yesterday, it rebounded, finding support in the strike. The same sentiment carried over to today’s early hours and supported oil prices by shifting the focus from the supply glut and failure to materialize the output freeze deal on Sunday. Many analysts believe the present positive move is short-lived and that the focus will soon shift back to the supply glut and negatively impact prices.

Asian markets supported by oil

The spike in oil prices also supported Asian markets on Tuesday. Japan’s Nikkei index rose 3.7% today, taking support from the spike in oil prices. You should note that the Nikkei fell more than 3% on Monday because of the earthquake in southwestern Japan. This sentiment could lift oil producers’ prices, like QEP Resources (QEP), WPX Energy (WPX), Carrizo Oil & Gas (CRZO), and Exxon Mobil Corporation (XOM), as well as the Pro Shares Ultra Bloomberg Crude oil ETF (UCO) and the SPDR S&P Oil and Gas Exploration and Production ETF (XOP).

The next article in this series discusses copper, gold, and silver performance this morning. Read on to learn more.


Latest Exxon Mobil Corporation News and Updates

    Opt-out of personalized ads

    © Copyright 2024 Market Realist. Market Realist is a registered trademark. All Rights Reserved. People may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.