Weekly US crude oil inventories jump by 7.2m b/d, DoE says

Weekly US crude oil inventories jump by 7.2m b/d, DoE says

The markets are edging higher on Wednesday despite an industry report showing that US inventories rose unexpectedly last week, with the focus continuing to be on the highly successful OPEC-led production cuts and the USA sanctions against Iran and Venezuela.

U.S. West Texas Intermediate (WTI) crude fell 3 cents to $62.43 a barrel. Analysts had forecast a decrease of 425,000 barrels.

Once again, the opinions of crude experts were proven on Wednesday to be spectacularly wrong: despite a Reuters poll estimating that crude stocks in the US fell 400,000 barrels last week, commercial crude inventories in fact surged by 7.2 million barrels in the week through March 29 - and this caused a slight dip in oil prices.

Oil prices could well break through the $70 level if official numbers from the US Energy Information Administration (EIA) reveal a reduction in US stockpiles and output, with the organisation scheduled to release its weekly report later on Wednesday.


Organization of the Petroleum Exporting Countries (OPEC) oil supply sank to a four-year low in March, a Reuters survey found, as top exporter Saudi Arabia over-delivered on the group's supply-cutting pact while Venezuelan output fell further due to sanctions and power outages.

Still, OPEC's total production in March was 30.40 million bpd, the lowest since 2015 and 280,000 barrels per day lower than February.

Similar concerns saw ICE Brent crude futures rise to $69.96, earlier today.

Investors will now eye data on USA crude inventory by the Energy Information Administration, due later today.


Meanwhile US production reached a record 12.2m barrels per day and imports rose to 386,000 barrels per day.

The 14 OPEC member states, which account for more than 44 percent of the world's total crude oil production, were to cut production by 800,000 bpd, while the allied producers - including Azerbaijan, Kazakhstan and Russian Federation - contribute a 400,000 bpd reduction.

"In November, we granted eight oil waivers to avoid a spike in the price of oil". In February, Nigeria produced 1.88 million bpd, 190,000 bpd above its OPEC cap.

Positive Chinese factory gauges and signs of progress in Sino-U.S. trade talks have boosted sentiment, helping to buoy regional stock markets.


"Furthermore, the Saudis are unlikely to forget a year ago, where they increased output in the lead up to USA sanctions on Iran, only for the U.S. to provide waivers to a number of buyers of Iranian oil", Patterson added.

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