On Wednesday, U.S. Energy Information Administration (EIA) data showed that while U.S. gasoline inventories fell to a new low since November 2017, crude oil inventories unexpectedly increased by 3.29 million barrels last week, six consecutive weeks of crude oil production higher than expected, the market waited for the OPEC+ meeting, oil prices fell more than 5% intraday, specific data:
U.S. EIA crude oil inventories changed 3.29 million barrels, an expected increase of 2 million barrels, compared to 4.268 million barrels.
Refined oil inventories changed 2.16 million barrels, an expected decrease of 1.1 million barrels, or -432,000 barrels, and EIA refinery equipment utilization changed by 1.2% to expected 0.5% vs. 0.4% previously.
Gasoline inventories changed by -1.488 million barrels, a decrease of 1 million barrels, compared to -1.993 million barrels in the previous value.
Crude oil inventories in the Cushing region decreased by 916,000 barrels, compared to -3,899,000 barrels in the previous value.
On Tuesday, data from the American Petroleum Institute API showed that crude oil inventories increased by 3.6 million barrels, gasoline inventories decreased by 552,000 barrels and distillate inventories increased by 573,000 barrels in the week ended October 29.
Oil prices tumbled overnight after higher-than-expected crude oil production and further pressure from the White House and many countries on OPEC+. WTI crude oil futures extended their decline to 4.79 percent, refreshing daily lows to $79.89 a barrel. Brent crude futures held a 3.98% decline, tentatively quoting $81.35 a barrel.
Explaining the reasons for the fall, Edward Moya, a senior analyst at OANDA, a member of the National Futures Association, said, "Crude oil prices fell because the API reported a sixth consecutive week of increased crude oil inventories, and the Biden administration exhausted all possible calls for OPEC+ members, and then only the strategic petroleum reserve was left." ”
Despite pressure from the U.S. and other importers, the market is widely expected that OPEC+ will stick to its plan to moderately increase production by 400,000 bpd at Thursday's meeting. After all, members such as Kuwait, Iraq, Algeria, Angola and Nigeria have all said they want OPEC+ to stick to its current plan to gradually increase production.
As Vandana Hari, founder of energy consultancy Vanda Insights, says, "OPEC+ has largely persevered, but the market will watch for the unexpected." ”
Ole Hansen, head of commodities research at Saxo Bank, said: "The FOMC will be uneasy as the cuts and future rate hikes could hurt economic growth. At the same time, commodities such as crude oil have been the preferred market for investors seeking to hedge inflation, a preference that could weaken somewhat if central banks such as the Federal Reserve turn hawkish. ”
Fitch, one of the world's three major international rating agencies, expects oil prices to be $80/b at the end of this year; brent crude oil is now expected to average at $72/b in 2022 and $73/b in 2023, up from $67/b and $68/b, respectively.
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