Propane/propylene inventories added 0.3 million barrels last week and are near the upper limit of the average range. WTI’s short-term indicators have improved despite continued weakness in the overall fundamental picture.
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Oil prices bounced mightily back above $40 a barrel on Wednesday.
Meanwhile, the Brent North Sea price for October’s shipment increased US$1.30 to close at US$43.10 per barrel at the London ICE Futures Exchange.
Aside from the global inventory situation, US government data on Wednesday showed crude stockpiles rose 1.4 million barrels last week, versus analysts’ expectations for an identical draw. Nationwide inventories probably declined by 1.75 million barrels, a Bloomberg survey shows before the EIA report.
The Energy Department on Wednesday released mixed data on United States production and inventories of crude and gasoline – figures closely watched by investors.
Crude stockpiles at Cushing, Oklahoma, the delivery point for WTI and the biggest U.S. oil-storage hub, dropped by 1.3 million barrels last week, the API said Tuesday, according to a person familiar with the figures.
But a global glut in motor fuels and other refined products since have stymied the rebound.
Crude oil futures fell by Rs 20 to Rs 2,790 per barrel today as speculators cut down their bets amid weak cues from the Asian markets.
“Risks for oil remain skewed to the downside in 2H16”, analysts at Morgan Stanley said a report.
But they added oil prices would be under downward pressure in the near-term due to rising supplies, including from Libya, high crude and refined product inventories, as well as an uncertain demand outlook. “Right now, the supply and demand looks abysmal and rolling it into the maintenance period coming up in the fall makes it look even worse”, ICAP energy futures broker Scott Shelton said, referring to the maintenance season for refineries. “We expect global growth to move below consensus estimates”, Morgan Stanley said. “We see a floor around the mid-30s given potential OPEC chatter and investor views on the cycle”.
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The US Department of Energy will release the latest official stockpile data later Wednesday. Baker Hughes reported that the number of active drilling rigs rose only by 3 units.
