Falling US crude stockpiles tend to push prices higher because they indicate strengthening demand in top global oil consumer, the United States. At the same time, however, the U.S. DoE reported a larger than anticipated increase in oil product inventory for things like gasoline and heating oil.
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Some expected more light in forthcoming EIA data.
U.S. West Texas Intermediate (WTI) crude futures slid 95 cents, or 2.1 percent, to $43.95.
Citigroup has estimated a supply outage of 3.5 million barrels per day. Heightened economic volatility and increased geopolitical tension might help these trends to continue support the oil price trajectory but now that the summer months are drawing to a close there is a greater chance that we will start seeing retracements before the end of this year. The data surprised analysts.
On Friday, Baker Hughes will report the latest USA rig count data for the week ended September 16th.
Saudi Arabia became the world’s largest oil producer last month as US output continued to slide.
WPX Energy is a Tulsa, OK-based oil and natural gas exploration and production company.
A new “first-ever” analysis report published by the International Energy Agency found that investment in the global energy system dropped 8% despite continued and strong investment in renewable energy, electricity networks, and energy efficiency.
The total level of investment was US$1.8 trillion (€1.6 trillion), down from US$2.0 trillion in 2014, it said in a detailed analysis of the energy sector. Over the past year, we have seen some historic price movements in oil and precious metals.
“NOCs, who own the bulk of the world’s low-priced reserves, I would say their share will maintain if not become higher”, the IEA’s executive director, Fatih Birol, told Reuters in an interview.
“Consequently, stocks of oil in OECD countries are swelling to levels never seen before”, the agency said.
“An oil industry dominated by the IOCs or NOCs (presents) two different pictures”, he said.
The IEA – which advises oil consuming nations on energy issues – added that oil demand growth was slowing while supply was rising.
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Crude oil was sold off again overnight, despite a surprise drawdown in US crude stockpiles. As the fourth quarter approaches, investors need to remain mindful of this changing investment landscape in the commodity space. If the USA central bank increases interest rates, dollar strength will become a more important factor. The observations he makes are his own and are not intended as investment advice.
