The penultimate full trading week of 2018 brought no clear indication of where oil markets would go in the upcoming weeks. On one hand, the OPEC/OPEC+ deal placated fears that Q1 2019 would end up in an oversupplied market, on the other hand signals of demand weakening in China amid slower-than-expected economic growth figures and decelerating refinery throughput have largely resulted in oil teetering around the same levels as it was last week.
Brent closed the week trading around 61 USD per barrel, whilst WTI traded in the 52-52.5 USD per barrel interval on Friday. As it seems, global crude prices will not react to the Vienna Agreement until the states effectuate the production cuts and traders see actual changes in inventories – a development that is expected to surface only in January-February 2019.
1. US Commercial Crude Stocks: Every Little Helps
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- US Commercial crude stocks have continued their decrease after last week’s trend reversal, dropping 1.2 MMbbl week-on-week to 442 MMbbl.
- Confirming our last week’s prediction, the US went back into net crude importer category after exports dropped 929kbpd and imports grew by 1.1mbpd w-o-w.
- The overall slowdown in stock draws is a worrisome prospect as the US energy sector needs at least 3mbpd exports to keep stock levels in a manageable range, yet exports are far too volatile to attain that.
- Gasoline stock levels surged 2.1…