The correlation between the OPEC/OPEC+ production cuts and rising US production has been the theme of the oil market for the past several months and most likely will be further on. This week has been no different, creating a peculiar set of counteracting trends that first push prices up, then pull them down – OPEC producing the lowest volume in 4 years was easily undone by two US oil majors, Chevron and ExxonMobil revealing their ambitious plans to ramp up Permian output even higher than it is already, with US crude stocks most likely rebounding back from last week’s decline.
Early signs (see Point 4) point to the possibility of a breakthrough in US-China trade talks, yet if the history of the last four months is anything to go by, do not bet your money on it yet. As of Wednesday end of day, Brent traded 65.7-66 USD per barrel, whilst WTI oscillated around the 56 USD per barrel mark.
1. US Crude Stocks Rise While Gasoline and Distillate Inventories Draw
- The market once again saw a stock buildup for the week ended March 01 (API reported 7.3MMBBl w-o-w – EIA 7.1 million bpd.
- US crude exports dropped to 3.4mbpd from last week’s 3.6mbpd, with imports falling along at a much steeper rate to 5.6mbpd, some 1.6mbpd down from the week ended February 15.
- After weeks of incremental decreases, the refinery utilization rate started its move upwards with a 1.2 percent hike to 87.1 percent, on the back of 179kbpd of additional…