Despite the 'bullish' inventory data (and demand), WTI Crude just sank towards a $45 handle - red on the week - as tanker-tracking firm Petro-Logistics signals OPEC crude supply rising again this month will be the highest this year (along with US shale output at record highs).
As Bloomberg notes, supply from OPEC members is set to exceed 33 million barrels a day this month, more than 600,000 barrels a day higher than the first-half average, according to Petro-Logistics. The data could reinforce skepticism about the effectiveness of the Organization of Petroleum Exporting Countries’ production cuts as officials from the group gather for meetings in St. Petersburg, Russia.
This pushed prices below the pre-DOE data lows...and red for the week.
Oil remains in a bear market on concern that growing output in the U.S., Libya and Nigeria is offsetting other producers’ curbs, meaning stockpiles aren’t shrinking fast enough. The report from Petro-Logistics found that Saudi Arabia, the United Arab Emirates and Nigeria are behind the extra barrels. The latter is exempt from making cuts as it tries to recover from disruption due to theft,sabotage and attacks by rebels.
The findings of Petro-Logistics further weaken “the foundations under the output deal, which is what the market is also saying by sending prices lower,” said Jens Naervig Pedersen, analyst at Danske Bank A/S. “It puts pressure on OPEC before the meeting this weekend.”Oil bulls hope remains with the rig count later today and more headlines of hope ahead of Monday's meeting of oil leaders.