ibusinesslines.com September 20, 2018

Crude Oil Rallies After API Shocker

13 January 2018, 12:47 | Kelvin Horton

A gas station attendant pumps fuel into a customer's car at PetroChina's petrol station in Beijing China

A gas station attendant pumps fuel into a customer's car at PetroChina's petrol station in Beijing

The American Petroleum Institute (API) reported a staggeringly large draw of 11.19 million barrels of United States crude oil inventories for the week ending January 5.

The main question for USA gasoline stocks will be whether last week's storm that brought ice and snow up and down the East Coast dampened demand, as expected with drivers trying to stay off the roads.

Iranian Oil Minister Bijan Zangeneh said Tuesday that prices this year were supported in part by OPEC commitments, but also by demand strains from severe winter weather.

Analysts said his remarks alleviated market concerns about a wind-down of the OPEC-led deal to reduce production.

West Texas Intermediate, the US benchmark, has been trading over $60 per barrel for several weeks now.

Nevertheless, higher oil prices will make investment into US shale oil more attractive.

Brent crude futures traded 55 cents lower at $68.71 a barrel at 1253 GMT. The session high for the global benchmark was US$69.37, highest since May 2015.

On Dec. 9, the EIA estimated that USA crude oil production could average 10.3 million barrels per day in 2018 - record levels for the United States and roughly 1 million barrels per day higher than estimated 2017 figures.

EIA research shows that US gasoline prices tend to follow the price of the best grades of oil in Europe, more than they follow the price of the best USA crude.

Some of Russia's counterparts in OPEC, namely Iran, had expressed concern that the rally would stimulate USA shale oil production, which has balanced the effort to narrow the gap between supply and demand over the previous year. Also, the dollar fell in a broad sell-off after a report that China was ready to slow or halt its US treasury purchases.

The greenback-denominated commodity has also benefited from weakness in the dollar, which neared a one-week low on Thursday, as it makes oil cheaper to buy for holders of other currencies.

OPEC crude oil production is forecast to increase by 0.2 MMBPD in 2018, partially reflecting the Energy Information Administration's expectation of Libya maintaining relatively high production levels achieved near the end of 2017, according to EIA's just-released Short-Term Energy Outlook (STEO).

At this consumption level, a dollar increase in crude price on a permanent basis will increase the oil import bill by roughly Rs 10,000 crore per annum.

"On a fundamental basis, the first half of year is about 1.5 million barrels per day weaker from a demand perspective than the second half of the year", he told CNBC's " on Wednesday.

Other News

Trending Now

Here's How Republicans Are Reacting to Trump's 'Shithole' Comments
Ahead of Martin Luther King Day on Monday, Jan. 15, President Trump signed a proclamation to honor the slain civil rights legend. The sources spoke on condition of anonymity because they weren't authorized to publicly describe the conversation.

Schoolgirl's hijab cut in 'cowardly act of hatred'
But the man came back just as Kahawlah was waiting for her brother who was stopped at a light across the street. "It's startling, it's disturbing, it's nerve wracking", Sidhu told reporters on Friday.

Jacksonville Vs. Pittsburgh: The Rematch
The Jaguars come into the game as the AFC South champions at 10-6 and are the No. 4 seed in the conference. Look for Bell to garner close to 30 total touches as the Steelers look to win the game in the trenches.

Knoxville Man Named in The 'Top Ten Most Wanted' List
Police recovered Wilson's vehicle and are now searching for Wilson himself, whom they describe as "armed and extremely unsafe ". KPD said if Wilson isn't apprehended by Friday morning, they're considering putting out what is known as a Blue Alert .

How Tua Tagovailoa Stepped Up, Dropped Back, and Saved Alabama
In 1881, the school moved to its second location on Beretania Street adjoining Washington Place, now the Governor's residence. Tagovailoa is destined for success under Saban, who has never had a quarterback with Tagovailoa's physical gifts.

South Korea proposes unified Olympic women's ice hockey team with North Korea
North Korea has yet to comment on the South's offer, which is in the spirit of the original deal and even goes beyond it. Vice President Mike Pence and Karen Pence will lead the USA delegation to the 2018 Winter Olympics in South Korea .

Snow-melting rain, flooding and fog forecast for Friday
Anderson said her daughter, who lives a little further north of East Brady, had water in her basement until the ice jam gave way. According to the advisory, the local fire department reported an ice jam on the Rocky River in the city of Rocky River.