Oil prices drop on inventory data
20 Apr 2017 07:30 GMT
|By A/S Global Risk Management.|
| By Michael Poulson, A/S Global Risk Management|
Oil prices dropped sharply yesterdayafter the weekly U.S. oil inventory report from the EIA showed a smaller than expected draw in crude and surprise build in gasoline stocks, see details below. U.S. oil production is around 9.3 mio. barrels per day, almost around 2-year-high. Crude oil inventories remain near record levels. At time of writing, oil prices have recovered somewhat and Brent is around $53.4, likely as markets are finding their feet after the report and new comments on the oil production cut deal.
Release: EIA oil data (Consensus)
Crude: -1.034M barrels (-1.470M)
Distillates: -1.955M barrels (-0.988M)
Gasoline: 1.542M barrels (-1.938M)
Refinery utilization: 1.9%
At a press conference, OPEC's secretary general stated that market rebalancing is getting closer and that the decision to extend / not extend the current oil production cut agreement will likely be taken at the OPEC meeting on 25 May. The 6-month production cut deal expires in June and consists of a 1.8 mio. barrels per day cut in production by OPEC and non-OPEC oil producers. Kuwait's oil minister this morning stated that he "I expect we will have an extension of the agreement", and that talks among the oil producers are ongoing.
Turning to economic data front, today sees U.S. Philadelphia Fed Manufacturing Index and Bank of England's Gov. Carney speech.
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