Crude Oil slips awaiting Inventories

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HotForex Market Review
HotForex Market Review

USOil, H1

US Oil is down 0.7% at $67.66 today , ebbing back from yesterday’s rebound high at $68.33 after the weekly API report showed U.S. inventories rise by 1 mln barrels in the week to May 25th, which was nearly double the median forecast. Crude prices are now just over 3% up on the six-week low that was pegged on Monday, but remain 6.8% below the 42-month peak that was seen last week. There is a cautious disposition in crude markets presently, with participants looking for clarification from OPEC and Russia on their supply intentions. Market sources cited by Reuters suggest that Saudi Arabia and Russia have been discussing rising output by 1 mln barrels per day to offset the loss in Venezuelan supply. The next OPEC meeting, in three weeks, (June 22) will be a particular focus following indications that a softening in the OPEC-led supply accord could be afoot, though a Gulf source, also cited by Reuters, suggested today that Saudi is of a mind to maintain prevailing quotas through to year-end while making for any supply shortfalls (such as Iranian supply, which is facing an embargo from the U.S.) On the year-to-date, crude prices are up 12.3%, and are showing a year-on-year advance of 40.3%. Today’s EIA inventories (15;00 GMT) are expected to show a draw-down of 400,000 barrels from last weeks surprise huge build of 5,800,000 barrel build.

 

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