Oil posted record prices for the sixth consecutive session in choppy trading conditions.
WTI hit $110.20 with Brent at $106.45. Both contracts dipped below these highs overnight but begin today at $109.60 and $105.75 respectively.
The EIA data revealed a huge increase in crude stocks - up 6.2mio bbls (expected 2mio bbls rise) which initially prompted a dip in prices but news of further supply difficulties in Nigeria over increased unrest added support and this impetus pushed oil through its previous high.
The market is ignoring fundamentals currently - whilst the geopolitical risks associated with Nigeria are supportive, large crude stocks and a slowing global (and US) economy are undisputedly bearish but are not reflected in the price currently.
This points to the overwhelming influence of the speculative/investor sector who are trading oil purely in the context of the ailing Dollar. Therefore until such time as the Fed reveals its hand at next weeks FOMC meeting the oil market will continue to be a hostage to fortune of the currency markets.
Brent crude likely to trade within a $107- 104.70 range.