A day after the American Petroleum Institute pressured already stressed oil prices further with an unexpected inventory build, the Energy Information Administration reported instead that crude oil inventories were virtually unchanged for the week.
At 441.4 million barrels, the inventories are within seasonal limits, the EIA said in its last weekly inventory report for the year.
Refineries processed 17.4 million barrels of crude daily last week, producing 10.1million barrels daily of gasoline and 5.4 million bpd of distillate fuels. Inventories of gasoline added 3 million barrels at the end of the seven-day reporting period, and distillate fuel inventories staying unchanged.
Crude oil, meanwhile, has been having an exciting week with sharp falls prompted by market-wide worries about an oversupply amid slowing global economic growth, followed by a partial rebound as traders took advantage of the low prices. As of the time of writing, Brent crude was trading at US$53.70 a barrel, up 1.84 percent from yesterday’s close, and West Texas Intermediate was changing hands for US$45.63 a barrel, up by as much as 2.29 percent.
It seems nobody knows exactly which way prices would go within a space of a few hours right now, although it’s safe to say they would reflect stock market movements pretty accurately.
“For the time being, the stock market and the oil market will echo each other,” a South Korean commodities analyst told Reuters today. “Global economic slowdown worries have been weighing on stock market movements, and oil prices are not free from those concerns.”
Prices could begin to recover once OPEC cuts enter into effect in January although the effect may not be immediately apparent, unlike two years ago, when the first production cut agreement was struck. It looks like this time, the headwinds are stronger and a lot of positive economic data would be necessary to convince a worried market the global economy will need more oil.
By Irina Slav for Oilprice.com
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