Losses were softened on expectations the USA central bank will delay raising rates until 2016.
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And don’t forget that tons of drilled but uncompleted shale oil wells can be put back in action should prices begin to rally meaningfully higher.
Crude oil stored at Cushing reached an all-time high of 62.2 million barrels in mid-April 2015 and has declined to about 54 million barrels over the intervening months. Latest closing price was -11.56% below its 50-day moving average and -55.53% below its 200-day moving average. Analysts had expected a smaller 0.8 percentage-point decline in usage.
The Nasdaq Biotech Index rose 2 per cent after falling 3.8 per cent in the previous session. [API/S] Oil prices slid after the EIA report. Companies reporting next week include Johnson & Johnson, Intel Corp. and JPMorgan Chase & Co.
Many pundits have updated their outlook for oil prices at each floor on the way down, letting the market do the work for them.
Among the season’s early reporters, Yum Brands Inc. tumbled the most in 13 years after the owner of the KFC, Pizza Hut and Taco Bell chains posted profits that missed analysts’ estimates.
“Since August, with very few exceptions…the price stood under $50, so it is very significant”, said Eugen Weinberg, head of commodities research at Commerzbank.
Crude-oil prices were slightly higher in Asia on Thursday as Chinese traders returned after a weeklong break, but worries over an unexpected increase in US inventories whittled down gains earlier in the session.
According to the EIA, the USA crude stocks added 3.1 million barrels in the week ended October 2, compared with the 1.75 million barrels estimated by pricing agency Platts.
The Producers for American Crude Oil Exports (PACE)-a coalition of 16 independent exploration and production companies-noted that Pres. Barack Obama’s recent statements on USA trade policy following the approval of the Trans-Pacific Partnership do not square with the administration’s position on maintaining the crude export ban.
US Stockpiles Brent for November settlement was 36 cents higher at $52.28 a barrel on the London-based ICE Futures Europe exchange. Shares of Diamond Offshore Drilling, Transocean and Chesapeake Energy jumped more than 4% apiece.
Any supply builds are viewed as bearish for crude, amid a glut of oversupply on energy markets worldwide. Mr. McGillian likened that data to pouring “cold water on the market”. Diesel futures fell 0.1% to $1.6094 a gallon.
“Overall, we have a real battle going on, with crude technically having broken out of the range we have been in for more than a month”.
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Our call for WTI to tumble to $30 per barrel in the coming months hinges primarily on seasonal trends in the oil market. “But fundamentally we are seeing builds and that should continue in the weeks to come”.
