Crude oil prices may decline in Asia trade on Thursday as weekly supply data out of the U.S. pointed to growing inventories.
ICE Brent was quoted at US$65.92 a barrel after the data, up 0.69 percent, while NYMEX West Texas Intermediate rose 0.45 percent to US$55.94 a barrel. Brent settled up 0.99 percent at US$66.12 a barrel on Wednesday and WTI gained 1.01 percent to US$56.25 a barrel.
Crude oil inventories in the U.S. jumped 8.8 million barrels to 440.7 million barrels by the end of last week, the American Petroleum Institute said on Wednesday, compared with a 3.2 million barrel gain expected. Gasoline inventories rose 188,000 barrels, compared with a 1.5 million-barrel decline expected and distillates dropped 3.2 million barrels, compared with a 1.7 million-barrel decline forecast.
Stocks at the oil storage hub of Cushing, Oklahoma, rose 726,000 barrels and refinery runs rose 216,000 barrels per day (bpd), API said.
The figures will be followed by official data on Thursday from the Energy Information Administration at 1030 U.S. EDT, a day later than usual because of a public holiday.
Elsewhere, the monthly review of supply and demand from the Paris-based IEA released on Wednesday held global supply and demand growth estimates mostly steady at 1.3 million barrels per day (bpd) and 1.4 million bpd for 2018 and 2019 respectively.
The expected price decline in the Thursday session follow oil prices’ recent tumble.
Credit Suisse in a 13 November note to clients called the current market in “meltdown” and said if OPEC and allies do not cut at a meeting in Vienna in early December, prices could fall below US$50 a barrel near term as a seasonal demand dip in the first quarter of next year will add further pressure.
“The selloff in the last two weeks has been driven by a 300,000 barrel upward revision to U.S. supply and the granting of waivers on Iranian exports causing concern much less Iranian oil than expected will come off the market,” Credit Suisse said.
The eight nations which received waivers account for around 75 percent of Iran’s oil exports, Reuters reported recently, citing trade data.
“And despite Saudi Arabia pledging to reduce production by 500,000 barrels beginning in December, the subsequent tweet from President Trump (“hopefully, Saudi Arabia and OPEC will not be cutting oil production”) and the absence of a Saudi response has prompted the market to question whether a cut (which is necessary) occurs. We believe plunging oil markets will force OPEC to cut production, making the next OPEC meeting on 12/6 critical,” it said.
Hopefully, Saudi Arabia and OPEC will not be cutting oil production. Oil prices should be much lower based on supply!
— Donald J. Trump (@realDonaldTrump) November 12, 2018