September Crude Oil Weekly Recap
September U.S. West Texas Intermediate crude oil futures are currently in a position to finish lower for the week as investors react to a rise in U.S. production and reports from earlier in the week of a jump in OPEC production. The deciding factor is likely to be the Baker Hughes rig count.
According to the U.S. Energy Information Administration, U.S. crude inventories fell by 6.3 million barrels in the week ended June 30. Traders were looking for a draw of about 2.4 million barrels. Total inventories stand at 502.9 million barrels. Gasoline stocks also fell by 3.7 million barrels, to 237.3 million barrels.
This week’s report suggests increased demand for gasoline, but this news was offset by a 1 percent rise in weekly U.S. oil production to 9.34 million barrels per day (bpd).
Earlier in the week, it was reported that OPEC exported 25.92 million barrels per day (bpd) in June. This is 450,000 bpd more than in May and 1.9 million bpd more than a year earlier.
In other news, Saudi Arabia announced price cuts to Asia beginning in August. Russia said it was not interested in cutting production further.
Crude oil is under pressure this week because of the increased U.S. production. Last week, the EIA reported a drop in U.S. production, triggering an extension of the short-covering rally. Most bearish traders knew that this number did not represent a trend and was most likely caused by tropical storms and…