Shanghai Crude Futures have fallen further and faster than Brent
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rssPrivate oil data shows larger than expected draw in headline crude oil inventory
This is normally published Tuesday afternoon US time, but doe to the holiday Monday its Wednesday this week.
- The official data, US government, is also a day later than usual this week and will be published Thursday morning US time.
Via Twitter:
Oil extends decline to more than 2% as sellers eye key technical break amid risk-off mood
WTI is down by 2.4% as price falls below the 100-day moving average
Risk-off sentiment continues to be the major theme in trading today and it is also putting a major dent in oil prices as we’re seeing WTI fall by more than 2% on the day now. Price is contesting a firm break of the 100-day MA (red line) and if sellers manage that, it would see the bias in oil turn to being more bearish instead.
Iran sanctions and the more than likely OPEC+ output cuts extension are among factors that should help oil in the medium-term but with markets looking jittery as ever now, it’s hard to rule out a further decline particularly when a key technical break such as this is looming just around the corner.
The move lower in oil and weaker risk tones are part of the reason weighing on the Canadian dollar today with USD/CAD rising above the 1.3500 handle to highs near 1.3520 currently. For the loonie, do be reminded that we still have the BOC meeting decision later today.
Kuwait oil minister says it’s premature to say if output curbs will be extended in June
Comments from Kuwait’s oil minister
- OECD commercial oil inventories are falling towards last 5-year average but “we still have more work to do”
- Believes oil market expected to be balanced during the second half of the year “more towards the end of the year”
It would be a shock to the oil market if OPEC didn’t extend the production cut.
An Update :Dollar Index ,INR ,EURO ,JPY ,AUD ,GBP ,CAD ,CRUDE ,SPX ,NASDAQ Composite ,Shanghai Composite -Anirudh Sethi
After pushing higher in the first part of last week, the US dollar reversed lower and saw follow-through selling ahead of the weekend. The reversal saw all the major currencies but the British pound gain on the greenback last week. Although the ineptitude of Prime Minister May has weighed on sterling, the immediate reaction to her departure saw the pound fall as the risk of a no-deal exit rose.
As we discuss below, the technical condition warns that the corrective forces could continue through the week ahead. Looking ahead of the macro calendar, this could persist until the run-up to the ECB meeting on June 6 and US employment data the following day. Of course, these things are subject to change and fine-tuning. The dollar remains supported by wide interest rate differentials and an economy that still appears stronger than Japan and most of Europe. It strikes us that this is a short-covering correction for the major currencies rather than a turn in the underlying trend.
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Crude oil inventories +4740K vs -1700K estimate.
Weekly crude oil inventory data from the DOE
- Crude oil inventories, +4740K vs -1700K est
- Cushing OK crude inventory, 1266K va 1805K last week
- Gasoline inventory, 3716K vs -850K estimate
- Distillate inventory, 768K vs -500K estimate
- US refinery utilization -0.6% versus +0.5% estimate
- crude oil implied demand 18466 versus 18936 last week
- gasoline implied demand 9845.4 versus 9932.6 last week
- distillates implied demand 5198.3 versus 5293.0 last week
The private data from the API showed a +2400 build but this data is even larger. THe price of crude oil has moved down to $62.00 from $62.50 before the report.
The contract is below its 200 hour moving average at $62.34 and is moving toward the 50% retracement of the move up from the May 6 low and $61.93.
Oil – private survey of inventories shows surprise build
Reuters poll of analysts had forecast crude inventories to fall 600,000 barrels last week.
The government data follows Wed. morning US time, this is the privately conducted survey.
more to come
New OPEC+ meeting dates reportedly being considered: 1-2 July or 22-23 June
According to Energy Intelligence’s senior correspondent, Amena Bakr
Hence, suggestion is that the meeting could be move to either of the two dates highlighted in the headline above. No firm decision has been made yet though, so just keep this in your back pocket for now.
DJ on OPEC – closer to continuing existing production targets through end 2019
The Wall Street Journal with a wrap up of the weekend meeting of the Joint Ministerial Monitoring Committee (JMMC)
- OPEC and allies moved closer to continuing existing production targets through the end of the year
- the group has also been looking at a handful of scenarios, some of which would involve easing production curbs
“Today, we are looking at various options [for the second half of 2019] including softening the production levels,” Russia’s energy minister Alexander Novak told reporters. “If there is a growth in demand, we are ready to consider and mitigate those parameters, a partial recovery of production,” he said.
WSJ article is here, may be gated. Despite Mideast Tensions, OPEC Inches Closer to Maintaining Production Cuts Through 2019
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Background to the weekend meeting:
- OPEC and allies agreed last December to cut output by a collective 1.2 million barrels a day
- The agreement expires in June
- There is a full OPEC+ meeting next month to finalise production options
Oman’s oil minister says its possible Iran may leave OPEC
And more from Oman’s oil minister:
- Oil cut extension with same quotas as June is likely
- oil inventories globally are at levels suggestive of sufficient supply