"The API inventory data in the USA fits with. a topping pattern - or at least a decent pause - for oil prices at the moment", said Greg McKenna, chief market strategist at futures brokerage AxiTrader. "With the dollar strengthening, higher oil prices and softening economic growth, we see a threat to demand growth from 2019", BMI Research said on Thursday.
Examining whether other producers "could step in to ensure an orderly flow of oil to the market and offset a disruption to Iranian exports", the IEA said that neither Venezuela nor Mexico can raise output in the short term, "but some of the 1.5 mb/d that have been cut by other producers under the Vienna Agreement might be available to keep markets well supplied". Speculators could liquidate en masse and demand growth may underperform, while the amount of Iranian oil taken offline could end up at the lower end of expectations.
However, the tailwinds for crude oil now vastly outnumber the headwinds, so prices will likely continue upwards in the coming days, especially in light of the escalation in Israel following the move of the USA embassy from Tel Aviv to Jerusalem that ignited protests in Gaza, prompting an immediate military response from the IDF.
Goldman also said the tight market left "room for oil cartel Opec to exit [its production cuts] without significant price impact". In fact, the oil price rose along with demand until we saw a separation from that relationship as the mortgage crisis developed.
Tuesday's API crude oil stocks report came in at a surplus of 4.854 million barrels, up from the previous release of -1.850 million.
Venezuela's situation grows increasingly worrying and the expected drop in production from Iran means that prices are expected to reach four-year highs once again. Goldman Sachs, though, said even with a slowdown in demand and soaring USA output, global oil markets would remain tight.
Markets are treading carefully around uncertainty over Iran's supply, however, and signs of ample supply kept a lid on price rises Wednesday.
Trade group the American Petroleum Institute said crude stockpiles rose almost 5 million barrels, compared with analysts' expectations for a 763,000-barrel draw. The reason why this irks me is that many people look to this forecast to make designs about investing and their past doom and gloom about demand probably led to less energy investment that was needed to feed growing global oil demand.
US President Donald Trump last month accused OPEC of "artificially" boosting prices, putting pressure on producers to cool the market and in turn drawing a rebuke from some OPEC members.
The IEA expects 2018 supply growth from non-OPEC countries to rise by 1.87 million barrels a day, up by about 70,000 and more than double the 700,000 barrel-a-day growth in 2017. Gasoline stockpiles also shrank last week by 3.79 million barrels, the EIA reported.
This was the case with Drill, Baby, Drill the slogan, which proved to be popular and gained further prominence after it was used by Republican Vice Presidential nominee Sarah Palin in her debate with Joe Biden in the 2008 US Presidential elections.