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Irina Slav

Irina Slav

Irina is a writer for the U.S.-based Divergente LLC consulting firm with over a decade of experience writing on the oil and gas industry.

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Oil Prices Unmoved By Bullish EIA Report

Oil

A day after the American Petroleum Institute helped prop WTI up by reporting a 6.356-million-barrel inventory draw, the Energy Information Administration chimed in, reporting a much smaller decline of 1.9 million barrels in crude oil inventories for the week to November 17.

At 457.1 million barrels, the EIA said, crude oil inventories are within the upper half of the seasonal average. Analysts polled by Platts expected a draw of 2.1 million barrels in crude oil inventories and a build of 1 million barrels in gasoline stockpiles.

According to the EIA, gasoline stockpiles remained unchanged last week, after a 900,000-barrel build in the previous reporting period. That build followed a hefty build of 3.3 million barrels a week earlier and is more normal for this time of year when there is less driving and less demand for the most popular passenger vehicle fuel.

Gasoline production last week averaged 10.4 million barrels daily, the EIA also said, up from 9.9 million bpd in the week before. Refineries operated at 91.3 percent of capacity, processing 16.8 million barrels of crude daily, versus 16.6 million bpd a week earlier.

In addition to doubts about the OPEC oil deal extension, this week WTI received support from Canada: the closure of TransCanada’s 600,000-bpd Keystone pipeline due to a leak offered fresh support to prices, suggesting next week’s EIA report could include another inventory draw as a result of this suspension.

As for OPEC’s meeting, most analysts are still certain it will result in an extension, despite reports that Russia may not be all-in. In fact, according to some, these reports are only a tool to get prices even higher prior to the extension announcement, which won’t be a great surprise, so it will not have that much of a boosting effect on prices.

In the meantime, traders remain wary of making any big bets on oil in case something unforeseen happens in the run-up to the OPEC meeting, due next Thursday. WTI traded at US$57.73 a barrel at the time of writing, and Brent crude was changing hands at US$62.69 a barrel.

By Irina Slav for Oilprice.com

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  • Geno Simmons on November 22 2017 said:
    Its all computer driven now. Look at the oil ETF trades, 100 shares over and over again in patterns. Same thing has happen in the nyse/nasdaq market, HTF repetitive trades run the market. I'm sure .gov has its hand in it also. You will see no more 500 point drops in the dow anymore, its been computer programmed.
  • Kr55 on November 22 2017 said:
    WTI in backwardation. Should expect soon for the positive adjustments and production numbers in EIA to start to weaken. EIA is forced to count all the old privately stored oil that is being dumped into the market as new oil by adding it to the production and adjustment numbers. Old oil that is finally getting pulled out because the contango is gone. But, those hidden barrels run out eventually.
  • Geno on November 22 2017 said:
    EIA is forced to count all the old stored oil that is being dumped, its a EIA hide and seek. I think the EIA is publishing what ever it wants to keep oil in check.

    The SPR lost only .7million bbls. this week. Where is the oil that was supposed to replace the S.P.R.'s borrowed oil? The S.P.R. is probably only half full of what is being reported. I think the EIA's credibility is no longer what it used to be and the world oil markets have realized this. If this is correct the shale boom was a hoax, which fueled the US economy/market recovery with cheap fuel via the S.P.R.

    $100 bbl by 3/30/2018.
  • Brandon on November 22 2017 said:
    EIA are doing their best to keep bears happy as they are instructed to do so by the US administration. Same goes for Russia (well, is there any true difference these days...). US's R.
    But anyway WTI was up 2% today, so not exactly "unmoved". Let's see gasoline inventories next week...
  • Disgruntled on November 22 2017 said:
    Not only is almost all trading done by algorithms, almost all EIA pronouncements (and IEA, too, for that matter) are propaganda. Pay attention to the choice of verbs, adverbs, and adjectives. It is not technical reporting. It is sentiment massaging.

    I think $100/bbl in 2018 is a pretty bold prediction absent an international (true) crisis, but I think we should see $60 oil, and above, for the year. There is maybe a 2% supply cushion (counting the oil being held off market) on a roughly 100 mmbopd demand. For such a vitally important commodity, that almost seems like a panic situation.

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