“These inventory numbers on gasoline might go quite a ways to alleviate those fears” of a glut, Bart Melek, head of commodity strategy at TD Securities, told the Wall Street Journal.
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South Korea imported 1.10 million tonnes of Iranian crude oil last month, compared with just 286,374 tonnes imported a year earlier when sanctions were still imposed on Tehran, government data showed on Monday. That helped support the market today too.
Although gasoline stockpiles have fallen by almost 9.0 million barrels over the last three weeks, they still hover near record-highs as refineries churn out product at a rapid pace due to historically low crude prices.
West Texas Intermediate (WTI) crude futures were trading at US$47.10 a barrel, up 31 cents.
Saudi Arabia suggests it may be increasing its August crude output to a new all-time high as it could give it more leverage to influence the September informal talks on a possible production freeze, Reuters reported on Wednesday, citing industry sources.
Although the chances for reaching an agreement are slim, the efficacy of any coordinated output freeze to lead to higher oil prices is even more remote.
“With Russia joining the chorus, an array of bullish oil ETFs saw a sizeable influx of capital that lifted crude values by more than $5 a barrel off recent lows”, said Jim Ritterbusch of Chicago-based oil markets consultancy Ritterbusch & Associates. At 0737 Thursday AEST, WTI was up US36 cents, or 0.77 per cent, at $US46.94.
Russian Federation sees no signals that Iran will change its position on a production cap and agree to an output freeze, news service Interfax reported, citing an unidentified diplomatic source close to the talks. It does not anticipate reaching these levels by end of September – the time of the meeting in Algeria.
“Russia, Iraq and Iran are maxed out – or close to it”, Michael Wittner, global head of oil research at Societe Generale, wrote in a report.
“Investors are wondering: if Iran doesn’t participate in any such discussions, would Saudi Arabia still be amenable?” Oil watchers warn that prices could be getting ahead of themselves. Trade data seen by Reuters show that state-controlled oil firm PDVSA’s crude exports, which account for 94 percent of the country’s hard currency income, fell to 1.19 million bpd in July, excluding independent sales made by its joint ventures.
Some traders said the market could still be under pressure despite the EIA’s supportive supply-demand data, after crude stocks rose unexpectedly for the previous three weeks, and as US drillers return to the well pad.
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Production in the U.S.is estimated to increase from June 2016 figures of 4.1 million b/d to 7.1 million b/d in 2040.
