Oil hits four-year highs, dollar ekes out gains

Oil futures rose nearly two percent in American trade, with US crude hitting November 2014 highs, while Brent scaled October 2014 highs, shrugging off a spike in US crude inventories. 

As of 06:17 GMT, US crude futures due in November rallied 1.91% to $76.67 a barrel, while Brent December futures surged 2.03% to $86.52 a barrel, as the dollar index added 0.27% to 95.77. 

Us Inventories Surge 

The Energy Information Administration released its report on US crude inventories, showing a sharp increase of 8 million barrels in the week ending September 28, adding to the 1.9 million increase in the previous reading, while analysts expected a 1.1 million build, with total stocks now amounting to 404 million barrels, at five-year averages for this time of year. 

Gasoline stocks fell 0.5 million barrels, still 7% above averages, while distillate stocks fell 1.8 million barrels, making them 3% below averages. 

Otherwise, Federal Reserve Bank of Richmond President Thomas Barkin delivered a speech titled "The Outlook for Tomorrow: Five Numbers to Watch" at the West Virginia Economic Outlook Conference, where he pointed to strong growth rate and upbeat inflation, adding the Fed will now focus on business investment, labor compensation, and productivity gauges. 

Earlier US data showed private sector employment rose 230 thousand in September, adding to the 168 thousand in August, and beating estimates of 185 thousand. 

US ISM services PMI rose to 61.6 in September from 58.5, beating estimates of 58.0. 

Services PMIs are crucial as two thirds of American GDP are dependent on the services sector, with the readings covering many aspects of the economy such as retail, housing, utilities, healthcare, and finance. 

Oil prices are up 25% so far this year as OPEC and Russia carry on their agreement to cut global output to easy a previous supply glut, while the US withdrew from the Iran deal and sanctioned their oil exports. 

US Oil Rig Count 

Baker Hughes, a US oil services company, reported a drop of three rigs in the oil rig count last week to a total of 863 rigs.

US output has recently risen to the second highest in the globe, taking the place of Saudi Arabia while Russia continues at the top with 11.21 million bpd.