The weekly crude oil inventory release has shown a huge increase and come in far higher than expected, sending the price of brent back down below the $63 mark after the market earlier hit a 6-week high. The report came in as follows:
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Crude oil inventories: +7.9M vs +2.0M exp. API: +4.3M
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Gasoline: -2.8M vs -2.0M exp. API: -4.0M
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Distillates: -0.6M vs -1.3M exp. API: -1.6M
The headline reading not only was well above the consensus forecast but also comfortably higher than last night’s API reading. This is the 7th time in the past 8 weeks that the print has come in higher than expected. However, the drawdown in gasoline and distillates does take some of the negative aspect away from this report.
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Oil has dropped by around 30 cents since the release but the reaction hasn’t been that big considering the large headline build - possibly due to the components being less bearish. The market earlier made a 6-week high of 63.28. Source: xStation
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In other Oil news there are suggestions doing the rounds that Saudi Arabia will push OPEC countries to make deeper oil-production cuts by pressing members ahead of the massive initial public offering of its state run oil company Aramco. “They will be under enormous pressure to succeed [in pushing prices up] just before the IPO,” which is taking place six days later, one Saudi oil adviser said.
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Elsewhere, OPEC has admitted that demand for its oil over the next few years could be drastically weaker that it previously though, due to a combination of a weakening economy, rising supply elsewhere and pressure from climate activists.
