Gasoline inventories in the week to September 9, according to the EIA, were up by 600,000 barrels, after a 4.2-million-barrel decline in the previous week, still above what’s normal for this time of year, the EIA noted.
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This contrasts with the agency’s last forecast a month ago for supply and demand to be broadly in balance over the rest of this year and for inventories to fall swiftly.
“With our more pessimistic outlook for the second half of 2016 refining activity and revisions to crude supply, the expected draws in the third quarter of 2016 are now lower, while the build in the fourth quarter of 2016 is higher”, the IEA 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.
“Recent pillars of demand growth – China and India – are wobbling”, the agency said, adding that increases in European consumption had “vanished” and that USA “momentum” toward higher consumption had slowed. On the supply side, rising output by members of the Organization of the Petroleum Exporting Countries has more than made up for falling output among non-OPEC countries, especially the United States, formerly the engine of non-OPEC supply increases, the IEA said. This will likely lead to a more restrictive production growth scenario materialising for 2017, while it may also lead to slight price hikes above the average level we have seen the past two years. High-cost OPEC producers have been hit particularly hard. Crude prices fell about 3 percent for a second straight day on Wednesday following a 4.6 million barrel build in USA distillates inventories.
The company’s weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, weak operating cash flow and disappointing return on equity. Iran exported 2.2 million barrels a day, the same level it had done before worldwide sanctions were tightened in 2012.
Meanwhile, oil traders continued to weigh prospects that major oil producing nations will freeze output to support the market when they meet later this month. “With the price of oil at current levels, one would expect supply to contract and demand to grow strongly”.
Global demand growth is slowing at a faster pace than the group initially predicted.
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Gasoline stocks climbed by 567,000 barrels, above analysts’ projections for a rise of 343,000. “We don’t need more production”, said Mr. Schieldrop.
