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EIA cuts OPEC call by 390,000 bpd

Published Wednesday, June 10th, 2015

Oil prices were on a roll higher throughout yesterday. Perhaps buyers came in seduced by the headline that came out late Monday that the EIA sees US shale production from the Permian Basin, Eagle Ford and Bakken falling by 75,000 bpd in July from June. Alternatively, perhaps they were encouraged by claims from the Saudi oil ministry that the rise in its production to 10.3 mbpd was in response to global demand and nothing to do with chasing revenue.

The price rise of $2.19 bbl on Brent (64.88) and $2.00 bbl on WTI (60.14) could also have been in anticipation of draws in this week’s US stock figures, which as far as the API is concerned turned out to be the case. After the close last night the API reported a bigger-than-expected crude draw of 6.7 million bbls including a 950,000 bbl draw at Cushing. A gasoline draw of 3.87 million bbls was also way off expectations. These figures have pushed prices another $1.20 bbl higher as we write.

Prices were well on their way higher yesterday before the release of the latest EIA monthly oil report which we discuss in detail below, but headline scanners can be excused for reading the report as supportive of the day’s price move higher. “EIA lifts 2015 world oil demand growth forecast” sounds exciting but not when it is only by 20,000 bpd.

to read the rest of the report, please click here

Posted by David Hufton