Oil falls hard despite inventory draw as OPEC bides it's time

Summary:

• Crude oil inventories show first decline in 11 weeks (-7.3M)

• OPEC meeting concludes with no cuts decided

• Oil and Oil.WTI both experience heavy declines

For the first time in 11 weeks there’s been a drop in the weekly crude oil inventory release, but this data has taken a back seat to the OPEC meeting in Vienna. The DOE release showed a larger than expected drop of 7.3M vs -1.3M forecast ending the run of builds which dates back to . The print marks a large decline on the +3.6M seen last week.

In addition to the headline reading several of the subcomponents were also released:

• Gasoline: +1.7M

• Distillates: +3.8M

• Cushing; +1.7M

• Production: 11.7 mbpd - unchanged

All these reading moved higher which maybe takes the shine off the large drawdown in the headline, but all of these pale into insignificance compared to the OPEC meeting. The organisation has convened in Vienna for their bi-annual meeting but it seems like Oil bulls may well be disappointed with the outcome. Expectations for a production cut of 1-1.5m bpd appear optimistic with the Saudi energy minister earlier stating that a reduction of 1m bpd would probably be sufficient. The meetings today have concluded with no cut figures decided upon and traders will have to wait until tomorrow when Russia joins for any firm decision to be announced.

Oil has fallen back lower and closed the gap up seen over the weekend. Recent lows of 57.80 present possibly key support. Source; xStation