Api reports draw while market awaits EIA report
Source: FxWire Pro - Commentary / 21 Mar 2018 06:59:36 Eastern Standard Time
Both Brent and WTI is heading higher over Middle East tensions. WTI is currently trading at $64 per barrel and Brent at $3.9 per barrel premium to WTI.
Key factors at play in the crude oil market –
- The oil price is moving higher as the market speculates that President Trump will cancel the Iran agreement.
- Iran’s oil minister Bijan Zanganeh said that OPEC could start easing on the production quota at its June meeting. Iran is seeking to increase its quota from 3.8 million barrels per day to 4 million barrels per day.
- OPEC and Russia to cooperate on oil production beyond 2018. OPEC is reportedly working on an agreement which would make Russia a permanent partner of OPEC in oil supply management with OPEC. This OPEC supergroup would also include other participating non-OPEC countries.
- Venezuela in crisis as oil production declined to 1.6 million barrels per day.
- EIA projects U.S. crude production to increase to 11. 4million barrels per day by end of 2019 and U.S. would become the single largest producer by next five years.
- OPEC members and participating non-OPEC countries have agreed to extend the supply reduction agreement until the end of 2018.
- Saudi corruption crackdown yielded $106 billion according to the country’s attorney general.
- OPEC production was 32.28 million barrels per day in February, down 70,000 barrels from January, according to OPEC’s monthly oil market report.
- Current U.S production at 10.381 million barrels per day.
- The oil market is in backwardation, both Brent and WTI.
- API reported a surprising draw of 2.739 million barrels of crude oil. Gasoline saw a build of 1.156 million barrels.
Today’s inventory report from US Energy Information Administration (EIA) will be released at 14:30 GMT.
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