Crude prices have fallen roughly $10 per barrel in the past three weeks, with a 4 percent drop across regional markets this week alone. WTI ended the week at $66 per barrel, whilst Brent slid to $76 per barrel by Friday. The overall market sentiment is increasingly bearish, with Wall Street’s worst week since 2011 sending ripples through European and Asian stock markets. Global trade is also slowing down, with freight rates decreasing after an extensive period of growth.
OPEC has started sending mixed signals, too, with Saudi Energy Minister forecasting that the global oil market would shift to oversupply in Q4 2018 amid high stockpile rates. It seems that OPEC+ is comfortable with a $75-85 per barrel price corridor and will cut short its production ramp-up as soon as necessary.
1. US Oil Stocks Soaring Higher Still Amid Some Product Relief
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- US commercial stocks soared again last week for the fifth consecutive week, as inventories rose w-o-w by a further 6.3 MMbbl.
- In total, commercial stocks have risen to 422 million barrels – not including the US strategic reserve stock which currently comprises 656 million barrels of oil.
- The stock buildup against reasonably stable crude export numbers is a relatively risky development as looming pipeline bottlenecks might obstruct the free flow of exports even further.
- After last week’s 1.8 mbpd median, crude exports bounced back to 2.1 mbpd,…