The IEA said that global oil supply dropped by 200,000 barrels a day to 96.5 mb/d in January “as higher OPEC output only partly offset lower non-OPEC production”.
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“Given the falls that we have seen over the last three trading sessions, it is a little surprise to see such aggressive selling interest during our time zone”, said Michael McCarthy, chief market analyst at CMC Markets in Australia.
“A sanctions-free Iran, Saudi Arabia and Iraq all turned up the taps”, IEA reported.
The American Petroleum Institute (API), an industry group, reported a build of 2.4 million barrels in USA crude stockpiles for last week.
West Texas Intermediate futures sank to the lowest since May 2003, breaching the level reached in January, and the contango between front-month and second-month contracts, an indicator of traders’ bearishness, increased to the widest in five years. To know more about crude oil prices and crude oil inventories, read the first and second parts of this series.
That was reportedly based on a reporter’s tweet of the minister’s interview with Sky News Arabia.
Friday’s jump in Brent came after the United Arab Emirates energy minister said the Organization of the Petroleum Exporting Countries (OPEC) was willing to talk with other exporters about cutting output.
“Persistent speculation about a deal between OPEC and leading non-OPEC producers to cut output appears to be just that: speculation”. In the past several meetings of OPEC member states in Vienna, the cartel refused to reduce its crude production to defend its market share, and OPEC has to keep pumping over 30 million barrels of crude oil per day.
Oil prices briefly rallied after the USA commercial crude inventories report was released Wednesday.
Non-OPEC supplies ticked down by 500,00 bpd from a month ago and now stand near levels seen a year ago, the IEA said.
Another driver of the recent bullishness in the crude market has been the view that low oil prices will boost growth in demand.
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Imports fell 13.7 per cent to 7.12 million barrels a day, the biggest decrease since December 2014, the EIA said.
