mercredi 18 mars 2015
WTI nears $40 on renewed concerns about supply glut
Posted on 08:36 by nice news
There is no end in sight for the crude oil slump with prices heading lower yet again this morning. WTI is now down for seven days in a row, having only managed one ‘up’ day in the last 10 sessions. Brent is down for the fifth straight session and has managed just one positive day in the past nine. The common denominator behind the slump in both crude contracts is one thing: excessive oil supply. It just happens that the surplus is more extreme in the US compared to most other regions in the world, hence the widening of the Brent-WTI spread. Here, storage capacities are nearing their limits and investors are also growing worried that the recent sharp declines in rig counts have not and are unlikely to lead to a speedy slump in oil production. In fact, US oil output reached a fresh 42-year high in early March. Therefore as things stand, oil inventories could reach maximum storage capacity in some locations soon. If this happens, it would undoubtedly increase the pressure on oil prices even more.
The crude oil slump and its impact on the wider financial markets and the global economy means the weekly supply numbers from the US Energy Information Administration (EIA), released every Wednesday, is fast becoming one of the most-anticipated data. Gaining even more popularity is the supply data from industry group the American Petroleum Institute (API) which comes out a day before the official numbers from the EIA, though the reliability of the former has been called into question. Nevertheless the API data can be a good leading indicator for the EIA numbers. Prior to the release of the API data last night, economists were already expecting another large build in stocks of 4 million barrels for the week ended March 16. However as the API data showed a much larger build of 10.5 million barrels for the same week, a similarly large increase in the official data is now being priced in. Hence, the sharp falls in the price
The crude oil slump and its impact on the wider financial markets and the global economy means the weekly supply numbers from the US Energy Information Administration (EIA), released every Wednesday, is fast becoming one of the most-anticipated data. Gaining even more popularity is the supply data from industry group the American Petroleum Institute (API) which comes out a day before the official numbers from the EIA, though the reliability of the former has been called into question. Nevertheless the API data can be a good leading indicator for the EIA numbers. Prior to the release of the API data last night, economists were already expecting another large build in stocks of 4 million barrels for the week ended March 16. However as the API data showed a much larger build of 10.5 million barrels for the same week, a similarly large increase in the official data is now being priced in. Hence, the sharp falls in the price
WTI nears $40 on renewed concerns about supply glut
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