Yahoo Finance Oil Price Fundamental Daily Forecast – Bearish EIA Report Pressuring Prices
U.S. West Texas Intermediate and international-benchmark Brent crude oil futures are trading lower early Thursday after a steep sell-off on Wednesday. The selling pressure was strong enough to drive U.S. crude to its lowest level since September 19. The catalyst behind the selling was a rise in U.S. stockpiles equal to almost triple what analysts had forecast.
At 0829 GMT, December WTI crude oil is trading $69.56, down $0.14 or -0.20% and January Brent crude oil is at $79.42, down $0.21 or -0.26%.
According to the U.S. Energy Information Administration, U.S. crude stocks rose 6.5 million barrels during the week-ending October 12, the fourth straight weekly build. Traders were looking for a 1.6 million barrel build.
Inventories rose sharply even as U.S. crude production fell 300,000 bpd to 10.9 million bpd last week. Analysts said the drop was attributed to the effects of offshore facilities closing temporarily for Hurricane Michael.
Gasoline stockpiles fell by 2 million barrels last week, while distillate stockpiles declined by 800,000 barrels, according to the EIA. Forecasts called for a drop of 1.52 million barrels in gasoline and 1.5 million barrels for distillates.
Forecast
Oil prices are under pressure on Thursday because of the jump in inventories, however, losses are being limited by rumors the United States may be pressured to go ahead with sanctions on Saudi Arabia. This could push prices higher if the Saudi’s decide to retaliate the move with a supply cut.
In an attempt to prevent a speculative rally and keep prices under control, on Wednesday, Saudi Arabia assured OPEC that it is “committed, capable and willing” to ensure there will be no shortage in the oil market, OPEC’s secretary-general said on Wednesday. Russia also stands committed to increase supplies if necessary.
In other news, Saudi Arabia and Kuwait are expected to struggle to resume oil production from jointly operated fields that produced some 500,000 bpd any time soon due to operational differences and souring political ties, CNBC sources said on Wednesday.
This article was originally posted on FX Empire
