February Brent crude on London’s ICE Futures exchange fell 16 cents, or 0.5%, to $30.70 a barrel ahead of the contract’s expiration on Thursday. The previously forecasted price was $56 per barrel in 2016 for Brent, and WTI price – at $51 a barrel in 2016. West Texas Intermediate (WTI) crude oil prices are expected to be $2/b lower than Brent in 2016 and $3/b lower than Brent in 2017. Year-to-date, both grades have fallen roughly 17%.
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Forecast total US liquid fuels production declines by 0.4 million b/d in 2016 and remains relatively flat in 2017, as low oil prices contribute to drilling rig counts falling below levels required to sustain current production rates.
U.S. crude stockpiles rose modestly in the week ended January 8, while inventories of gasoline and distillates surged, according to data released Wednesday by the U.S. Energy Information Administration. Analysts polled by Platts expected supplies to be up 2 million barrels, but the American Petroleum Institute on Tuesday had reported a 3.9 million-barrel decline.
Gasoline stocks rose by 8.4 million barrels, compared with analysts’ expectations in a Reuters poll for a 2.7 million barrels gain.
Propane/propylene inventories on the other hand fell by 4.5m barrels last week.
The data showing the builds sent futures for heating oil and gasoline blendstock down almost 2 percent.
“I think today’s inventory report is all about products”.
The pair of factors could inflate inventories and weigh further on prices, he said.
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“The fact that a lower-than-expected US crude inventories figure would typically be supportive for oil prices goes to show that for now, the oil market is finding buyers hard to come by in the face of such intense selling”, he explained.
