Oil prices fell nearly 3 percent, came under pressure after the release of the US petroleum inventory report, which did not meet the expectations of experts. Another factor was the strengthening of the dynamics of today’s US currency.
US Department of Energy reported that crude oil inventories rose week of March 12-18 by 9.4 million barrels to 532.5 million barrels, a new record high for this time of year. Analysts had expected an increase to 3.5 mln. Barrels. Oil reserves in Cushing terminal fell by 1.3 million barrels to 66.2 million barrels. Gasoline inventories fell by 4.6 million barrels to 245.1 million barrels. Analysts had expected inventories to fall by 2 million barrels. Distillate stocks rose by 917,000 barrels to 162.3 million barrels. Analysts had forecast a drop in stocks at 800,000 barrels. The utilization of refining capacity fell by 0.6% to 88.4%. Analysts have suggested that the rate will fall to 0.1%. Meanwhile, oil production in the US in the week of March 12-18, dropped to 9.038 million. Barrels per day versus 9.068 million. Barrels per day from the previous week. Experts note that the decline in production rates are high enough, and if this trend continues over the next 1-2 weeks figure could fall below 9 million. Barrels per day. Also recall that yesterday the American Petroleum Institute reported that US crude inventories rose by 8.8 mln. Barrels last week, reaching 531.8 million. Analysts expected an increase of 5.7 mln. Barrels. “The latest data confirm that the experts who hoped to tighten conditions on the oil market, still can only hope for it,” – said the IAF Advisors.
“Gasoline demand remains significantly stronger than expected,” – said Jim Ritterbusch, head of consulting firm in the energy sector. He added that the decline in oil prices is constrained to continue the conversation about the level of extraction freezing.
Also today, a member of the leadership of the International Energy Agency said that the agreement between some of the oil-producing countries, OPEC and Russia to freeze production may not make sense, since the Saudi Arabia – the only country with the ability to increase production. Recall, Qatar invited all 13 members of OPEC and the oil producing countries outside the cartel to take part in the meeting in Doha on 17 April to discuss the possibility of freezing oil. According to the IEA forecast, the gap between demand and supply of oil will decrease later in the year, which will create conditions for the recovery of oil prices in 2017.
WTI for delivery in May fell to $40.13 a barrel. Brent for April fell to $40.63 a barrel.
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