The U.S. Energy Information Administration released its weekly petroleum status report yesterday showing that U.S. commercial crude inventories decreased by 3.6 million barrels last week, maintaining a total U.S. commercial crude inventory of 485.9 million barrels. In 2014, the average price of crude oil as calculated under the SEC standard on the first day of each month was $95 a barrel.
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Crude Oil: The federal government’s EIA report revealed that crude inventories fell by 3.57 million barrels for the week ending Dec 4, 2015, following a rise of 1.18 million barrels in the previous week.
USA crude prices remained near 2009 lows in early Asian trading on Friday as oil output in the Middle East continued to rise despite an existing global glut. Crude oil crumbled below $37 a barrel on Tuesday for the first time since February 2009.
And in the wake crude rout that has persisted over the a year ago and a half, all US oil companies can do is try to survive.
However, Sanjeev Gupta, who heads the Asia Pacific oil and gas practice at professional services firm EY, said: “The market remains weak overall due to global oversupply, compounded by the OPEC’s decision to leave its production quota unchanged”.
The Saudi oil minister Ali Al Naimi had also made any limitation on Saudi output conditional on wide non-Opec participation in production cuts.
Benchmark Brent crude dropped to a six-year low in London this week after OPEC effectively scrapped its output ceiling at a December 4 meeting as de facto leader Saudi Arabia stuck to a policy of squeezing out rival producers. The United States Oil ETF (USO) and the ProShares Ultra Bloomberg Crude Oil ETF (UCO) mirrored crude oil prices in yesterday’s trade. Because the US Dollar is inversely correlated to the price of US Oil, a resumption of US Dollar strength would presumably send US Oil (and other dollar-denominated assets) a good deal lower toward 2009/2008 lows.
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The report said that inventories at the storage hub in Cushing, Oklahoma – the nation’s largest – increased even though refineries took in more crude following the conclusion of seasonal maintenance. Analysts had projected an increase of 252,000 barrels. The stock has a 1-month performance of -42.7 percent and is -76.44 percent year-to-date as of the recent close. We use our SSI as a contrarian indicator to price action, and the fact that the majority of traders are long gives a signal that the US Oil may continue lower. “No, you can’t”, he said, although adding that prices would not likely fall that far. New vehicle registrations in Texas and North Dakota rose just slightly this year through September, after outpacing the nationwide growth in the boom oil years.
