Oil prices edged down amid trade doubts and worries about global economic growth. However, the raw material prices receive some support from the OPEC+ quota deal and the US sanctions against Iran and Venezuela
Brent crude oil futures fell to 67.55 USD per barrel, down by 0.06 USD or 0.1% on Tuesday, when the variety hit its highest price since November 16.
The light US crude WTI also fell to 58.92 USD per barrel, down by 0.11 USD or 0.2%. Yesterday, the WTI also touched its highest since November 12, reaching 59.57 USD per barrel.
Analysts say the economic slowdown may soon hit fuel consumption, which resulted in a decline of crude oil prices. Concerns about global growth and fears of continuing oversupply generate counter-winds for raw materials.
The crude oil prices rose by more than 25% this year, backed by OPEC+ quota deal to curb production by 1.2 million barrels per day, as well as US sanctions against oil exporters Iran and Venezuela.
Unstable supply prospects from Venezuela and Iran as well as production constraints from OPEC and Russia are the most important factors for the oil market. According to the analysts, the oil prices are likely to reach the threshold of about 70 USD per barrel, as fuel price inflation will hit demand at this level.
At the same time, oil prices are supported at levels above 50 USD per barrel as investments in shale production growth in the US will stop below this price.
Between the price levels of 50 USD and 70 USD, the US shale yield boom fully responds to global oil demand growth. Thus, the US oil exports have grown to a record 3.6 million barrels in February.
The US crude oil production as estimated by the Energy Information Administration showed that production for the week ending March 8—the latest information available—dipped slightly to an average of 12.0 million barrels per day after two weeks at an all-time high of 12.1 million barrels per day.
API reports surprise draw in crude oil inventory
The American Petroleum Institute (API) reported a surprise draw in crude oil inventory of 2.133 million barrels for the week ending March 15, coming in under analyst expectations of a 309,000-barrel build. This is the second week in a row for a surprise draw.
Last week, the API reported a large surprise draw in crude oil of 2.6 million barrels. A day later, the EIA reported a similar figure, estimating that crude inventories had drawn down by 3.9 million barrels.
Including this week’s data, the net draw is 1.5 million barrels for the eleven reporting periods so far this year, using API data.
The gasoline inventories dropped for the week ending March 15 in the amount of 2.794 million barrels. Analysts estimated a draw in gasoline inventories of 2.125 million barrels for the week.
Distillate inventories decreased by 1.607 million barrels, compared to an expected draw of 1.3 million barrels for the week.
Crude oil inventories at the Cushing, Oklahoma facility fell by 317,000 barrels for the week.
The U.S. Energy Information Administration report on crude oil inventories is due to be released on Wednesday at 10:30 a.m. EST.