Wed 20 Dec 2017 09:31

Oil prices inch upwards ahead of inventory data


By A/S Global Risk Management.



The weekly oil stocks data from the American Petroleum Institute (API), published last night, showed a drop in U.S. crude oil stocks of more than 5 mio. barrels last week, a drop in distillates stocks of almost 3 mio. barrels, while gasoline stocks increased by 2 mio. barrels. Consensus of the official oil inventory report, published by the International Energy Administration (IEA) this afternoon, is a draw of 3.7 mio. barrels in crude, a small draw in distillates and a build in gasoline inventories. The last four weeks have shown draws in crude oil stocks. Expect some volatility ahead of the publishing.

The new oil minister of OPEC's fifth largest oil producer, Kuwait, sees global crude demand increase by 1.5 mio. barrels per day next year. The growth rate complies with OPEC's forecast. The oil minister, Al-Rashidi, also said "that will support oil prices and support refining margins". Kuwait currently producers around 2.7 mio. barrels per day, but is planning to increase production to four mio. barrels per day in 2020. The country is part of the current production cut agreement entered by both OPEC and non-OPEC countries. OPEC's largest oil producer, Saudi Arabia, likely also sees increasing prices next year as the country stated that it expects oil revenue to increase by 12% in 2018.

Turning to economic data, today sees U.S. housing data and a tax reform vote. Also, Bank of England's Carney will speak this afternoon.


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