learningandfinance.com


Business

Surprise Build In Gasoline Inventories Shocks Oil Markets

Share

"The rebalancing in US crude stocks may have got under way, but concerns about further gasoline builds are rife even as the USA summer driving season shifts up a gear", said Stephen Brennock, an analyst with PVM Oil Associates.

Oil prices dipped on Wednesday as bloated United States supplies weighed on markets while a fall in Saudi crude exports was offset by rising production in the country.

Inventories have been heading back down in the USA and dropped by 1 million barrels in the latest week, the Energy Information Administration said Wednesday, a smaller drop than expected. USA crude futures were down 5 cents at $50.39 a barrel.

Oil futures fell during the trading session, touching their lowest in 11 days as the US government reported that shale oil output in May was expected to post the biggest monthly increase in more than two years.

Crude oil prices held higher on Thursday, following an over 3.5 percent drop in all crude benchmarks in the past session after reports came that gasoline inventories were surging, including another rise in us crude oil production, which stood at 9.25 million barrels per day (bpd).

Arabiya TV quoted Saudi Energy Minister Khalid al-Falih as saying on April 17 that the level of compliance among OPEC and non-OPEC oil producers with a global deal to cut output is very good. June Brent crude on London's ICE Futures exchange rose $0.40 to $53.33 a barrel.

Analysts said they expected crude oil inventories to have fallen by around 1.5 million barrels last week.

Support for marijuana legalization at all-time high
Brohl spoke Wednesday to a panel of IL lawmakers considering a proposal to make marijuana use legal in the state. Even if you show up for work as sober as a judge, you can be fired for flunking a drug test in most states.

Champions League Busquets back as Barca seek new miracle
Jordi Alba came close to delivering the opener on 19 minutes, but he could not get a touch to Lionel Messi's lob into the box. Juventus comfortably saw out the final stages to register their eighth clean sheet in 10 Champions League games this season.

Wounded vet running Boston Marathon carries race partner across finish line
During Monday's race, Hasay wore her late mother's engagement ring, whom she spoke about during the post-race press conference. Inspired onlookers rushed to congratulate Granville, giving him hugs and cheering him on as he rushed to complete the race.

Gasoline stocks also posted a counter-seasonal build of 1.4 million barrels.

According to data the single countries report to the Joint Organizations Data Initiative (JODI), Saudi Arabia's crude oil exports in February stood at 6.957 million barrels per day, the lowest volumes shipped in a month since May 2015 when exports were 6.935 million bpd.

"The glaring rise in USA gasoline refined product inventories, in combination with persistent lower-48 production growth, keeps us cautious on oil prices", said Chris Kettenmann, chief energy strategist at Macro Risk Advisors LLC in NY.

Geopolitical concerns have also helped underpin oil. Iran is showing "good cooperation with OPEC" under the deal, he said.

Much depends on the upcoming OPEC policy meeting on May 25, at which time a decision is expected on a possible six-month extension to the production-freeze agreement depending on the cooperation of non-OPEC producers (such as Russia).

At the same time, Citi experts warn that a failure to extend the output agreement may "precipitously" lower prices for crude, as increased supplied in late 2016 is still "a dark cloud hanging over the market".

"Five of the last trading days we've been lower", he said.

Share