Image credit: Global Risk Management

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Yesterday's weekly oil inventories deviated hugely from expectations and sent oil prices down, but only for a short blip. Comments from Iranian leader likely supported oil prices, making markets ignore the fairly bearish oil inventory report.

Brent oil price shortly touched $78.4 before heading back upwards to current levels of around $79.5. According to the weekly oil inventory report from the Energy Information Administration (EIA), U.S. crude oil inventories grew by 5.8 mio. barrels, gasoline by 1.88 mio. barrels, while distillates fell by 0.95 mio. barrels.

Iran's leader commented on the nuclear deal, addressing the European countries which signed the lifting of sanctions against the country in 2015. According to the Iranian supreme leader, "European banks should safeguard trade with the Islamic Republic. We do not want to start a fight with these three countries, but we don't trust them either". The comments are made after U.S. president a couple of weeks ago withdrew from the deal.

As oil prices increase, focus is increasingly turning to the OPEC/non-OPEC meeting next month. Talks are that some of the oil producers could offset the potential supply disruptions from Iran (sanctions being re-imposed) and Venezuela (production dwindling on economic havoc). OPEC and non-OPEC oil producers last year agreed to curb output by 1.8 mio. barrels per day in order to bring global oil inventories back to 5-year average and re-balance the oil market.

Turning to economic data, today sees a row of central bank speeches (ECB, BoE, Fed) and the ECB publishes account of monetary policy meeting this afternoon.