Sliding oil prices continue to plague global economies.
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New data from the Energy Information Administration released today for the week ended August 5 revealed that USA crude stockpiles increased by 1.1 million barrels.
Around 4:35 p.m. GMT (24:35 in Montreal), a barrel of Brent North Sea crude for October delivery was worth 45.05 dollars on the InterContinental Exchange (ICE) in London, down 34 cents from the close Monday.
S&P Global Platts surveys suggest that China’s crude imports in 2016 will average 7.4 MMbpd (million barrels per day), 10% higher than 6.7 MMbpd in 2015 due to demand from teapot refineries.
US crude futures slid 1.3% on Wednesday to just above $42 per barrel. To support our view, we would like to draw attention to the fact that not only do the members resist to trim output, but have in fact, pumped oil at full capacity in recent years. However, concerns about future economic growth related to the United Kingdom’s June 23 vote to exit the European Union and the easing of supply disruptions in Canada contributed to falling oil prices in late June. This revision was due to the 2016 base change and also partially due to a change in the United Kingdom production forecast.
All of this is fueling speculation that major oil producers could announce moves to stabilize oil prices, which recently fell back below $40 a barrel from over $50 two months ago. World oil demand next year will increase by about 1.15 million barrels a day, down from 2016’s 1.22 million barrels a day, OPEC said in a report on Wednesday. The total motor gasoline inventory fell 2.8 million barrels last week.
Shortages of basic foods and medicines have hit Venezuela hard, with looting and complaints of hunger ever more common. The organization has 14 members after adding Gabon in June.
OPEC, which controls more than a third of the world’s oil supply, said its July crude production inched up 46,000 barrels a day to 33.11 million barrels a day on higher output from Iraq and Saudi Arabia.
The EIA also added to the bearish outlook on oil’s supply-demand picture yesterday with a forecast that showed it was scaling back estimates for US crude oil output declines in 2016.
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Top oil exporter Saudi Arabia boosted its output to a record high in July, it told OPEC, in a sign that key members remain focused on market share rather than tackling a supply glut by curbing production.
