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US commercial and crude oil stocks hit fresh highs

Published Thursday, March 31st, 2016

A mixed set of data from the EIA on US oil inventories eventually turned out to be more on the negative side. To begin with, total commercial oil inventories rose by 1.5 million bbls to 1.356 billion bbls, a fresh all-time high. Although crude oil inventories rose by less-than-expected they still managed to hit a new high of 535 million bbls. Interestingly, the second consecutive weekly drop in Cushing stocks did nothing to support the front-month WTI spread which weakened by 11 cents/bbl to -$1.34/bbl yesterday. Although WTI managed a gain of 4 cents/bbl on the day it fell $1.53/bbl from the pre-EIA high.

Not even the expected draw in gasoline stocks and the unexpected fall in distillate inventories were able to halt the afternoon sell-off. The former drew 2.5 million bbls yet NYMEX RBOB settled 147 points down whilst the latter declined 1.1 million bbls with NYMEX Heating Oil closing 48 points higher but 412 points off the day’s high. Gasoline and distillate stocks are 5.9% and 26.7% higher than this time last year.

Brent gained 20 cents/bbl yesterday and more or less followed the movements of WTI as it eased $1.30/bbl from the session high. This was partly due to the general disappointment of the EIA statistics but the latest Reuters survey on OPEC’s March production also played its part. Analysts expect the organisation’s output to have risen by 100,000 bpd to 32.47 mbpd this month. It is mainly due to a 130,000 bpd rise in Iranian and a 60,000 bpd increase in Iraqi production. Saudi Arabia kept its output more or less unchanged at 10.18 mbpd.

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Posted by Tamas Varga

Tamas Varga has been in the oil industry since 1992 and with PVM for 18 years. During his time in the industry he has gathered a range of experience in the oil markets. At PVM Tamas is in charge of data collection and analysis.