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Big draw in crude oil and awaiting Fed decision (Brent: $50.0)

Oil prices increased ahead of the weekly oil inventory numbers - the numbers turned out to be rather bullish with huge draw in crude oil stocks and prices increased on the news. However, builds in distillates and gasoline surprised the markets as well as a refinery margin of 2.2% with a row of refineries coming back online.

Release: EIA oil data (Consensus)

Crude: -2,104,000 barrels (1,173,000)
Distillates: 3,060,000 barrels (997,000)
Gasoline: 2,840,000 barrels (-21,000)
Refinery utilization: 2.2%

Deadline for the U.S. Congress to block the Iranian nuclear deal has expired and in around one month, Iran should commence the nuclear disarmament. The International Atomic Energy Agency (the IAEA) will perform controls and in return, the West will suspend sanctions against the second-largest economy in the Middle East. According to Iran's oil ministry the country is likely to scale up oil production over the coming 6-12 months by around 1 mio. barrels per day, from 2.87 mio. bpd (April 2015).

The markets are in wait-and-see position today, awaiting news from the ongoing Fed meeting which is followed by statement and interest rate decision. Should the Fed decide on raising interest rates, this could result in short-term oil price decreases as the dollar would likely be strengthened on the news. No interest rate hike could then give the opposite reaction, but a lot depends on the comments in the statement from the Fed meeting. So volatility remain high today.