“With the price of oil at current levels, one would expect supply to contract and demand to grow strongly”. USA crude inventories fell by 14.5 million barrels in the previous week to September 2, the biggest weekly drawdown since 1999 as imports to the Gulf Coast hit a record low.
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Oil prices rebounded in Asian trade on Wednesday after falling by as much as 3 percent in the previous session, as data from an industry group showed a smaller-than-expected build in USA crude stocks.
Oil prices rebounded in early Asian trade on Thursday after falling around 3 percent in the previous session, supported by an unexpected fall in USA crude inventories. Analysts had expected an increase of 1.5 million barrels.
That confounded market expectations for a gain of four million barrels, according to analysts polled by Bloomberg News. Total supplies of crude oil and refined products rose by six million barrels in the week to 1.4 billion barrels, near the record high reached a few weeks ago, the EIA said. Non-OPEC supply is expected to return to growth in 2017 (+380 kb/d) following an anticipated 840 kb/d decline this year. The International benchmark Brent futures fell 1.90 percent to $47.40 and West Texas Intermediate (WTI) dipped 1.99 percent to $45.37 by 12:00 GMT.
Brent for November settlement was at $46.83 a barrel on the London-based ICE Futures Europe exchange, down 27 cents. The report also indicates that in August Saudi Arabia increased its oil production by 28,000 bpd to 10.605 million bpd.
On Tuesday, the International Energy Agency (IEA) released its monthly oil market report in which it noted, “Our forecast suggests that this supply-demand dynamic may not change significantly in the coming months”. The market will be oversupplied at least through the first half of 2017, the report said.
On Tuesday, crude futures settled down 3 percent after the world’s energy watchdog and OPEC both revised forecasts that signaled the global crude glut could persist much longer than expected. “Next week’s report will be telling, whether last week’s lost barrels finally show up in the petroleum balance sheet”, said John Kilduff, partner at NY energy hedge fund Again Capital.
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United States stockpiles fell the most in 17 years the previous week, surprising the market, although analysts said the decline was because of the suspension of imports and shutdown of some production owing to a severe hurricane in the Gulf of Mexico and not due to robust demand.
