Oil Ticks Down on Crude, Fuels Inventory Build
Crude oil prices moved lower today, after the Energy Information Administration reported an estimated inventory increase of 1.6 million barrels for the week to November 24.
This compared with a sizeable build for the previous week, at 8.7 million barrels, which pushed prices lower last week, contributing to other bearish factors.
A day earlier, the American Petroleum Institute estimated a crude oil inventory dip of a little over 800,000 barrels for the week to November 24.
In fuels, the EIA estimated inventory builds for the week to November 24.
In gasoline, the agency reported a stock increase of 1.8 million barrels for the third week of November, with production averaging 9.3 million barrels daily.
This compared with a modest inventory increase of 700,000 barrels for the previous week, when production averaged 9.4 million barrels daily.
In middle distillates, the Energy Information Administration estimated an inventory build of 5.2 million barrels for the reporting period, with production averaging 5 million barrels daily.
This compared with a middle distillate inventory draw of 1 million barrels for the previous week, when production stood at an average 4.9 million bpd.
Oil prices, meanwhile, remained volatile ahead of the OPEC+ meeting on Thursday, when most expect the cartel to announce an extension of its production cuts. Since the extension is already factored into prices, chances are the official announcement will not prompt any significant changes.
Yet some expect deeper cuts from Saudi Arabia and this could move prices higher, according to analysts. Just how much higher and for how long is a different question.
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“All eyes are on OPEC+ policy and demand outlook toward the end of this year, but WTI is expected to hover around $76, with a range of $5 each above and below, for a while unless OPEC+ significantly expands production cuts,” the president of Nissan Securities’ NS Trading, Hiroyuki Kikukawa, told Reuters.
ING analysts, meanwhile, cautioned that OPEC may delay its meeting yet again if it fails to reach an agreement on policy in advance. Internal disagreements were the cause of the first postponement. If the meeting is delayed again, prices will likely fall, ING said.
