Oil prices fall slightly back after weeks of increases

By A/S Global Risk Management.

Michael Poulson, Global Risk Management. Image credit: Global Risk Management

Updated on 23 May 2018 08:06 GMT

Brent oil price briefly touched $80 yesterday, but at the end of the day, fell slightly back. The weekly oil stocks data from the American Petroleum Institute (API) showed a decline in U.S. crude oil stocks of 1.3 mio. barrels last night. Gasoline and distillates fell by 620,000 barrels, distillates 1 mio. barrels. Now this afternoon's oil inventory report from the Energy Information Administration (EIA) will be followed closely for confirmation or deviation of this trend. Consensus for today is actually also a decline of around 1.3 mio. barrels. Expect some volatility around the publishing (16.30 CET). U.S. president on Monday issued further restrictions on Venezuela, prohibiting purchases of debt owed to the country - further adding to the economic difficulties of the debt-struck country. Though Venezuela has huge oil reserves, production has been dwindling for years as investments in the industry have been lagging. OPEC countries will meet next month to discuss the oil market and the current oil production cut deal. Potentially, the organization could raise output to offset the Venezuelan and - if sanctions are re-imposed - the Iranian oil. The planned meeting between the U.S. and North Korea could be postponed or cancelled. According to Trump there is "substantial chance" it will not take place on 12 June in Singapore. Turning to economic data, this morning saw the first in a string of Manufacturing PMIs, the German which disappointed slightly while the French improved. Eurozone PMI came out at 55.5 versys 56.2 previous. Later today, the U.S. Manufacturing PMI along with housing data is published.

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