Production and inventories. According to the weekly report published by the EIA, the US crude oil inventories increased by 0.6 million barrels up to 372.2 million barrels during the week that ended on February 8th. The report says that the current inventories are above the average value for this period.
At the same time the aggregate inventories of gasoline declined by 800 000 barrels or 0.3% down to 233.2 million barrels. Analysts had anticipated a 2.2% increase in the US oil inventories.
Now let’s have a look at the major market drivers:
Bearish factors:
· In Q4 2012, Japan’s GDP declined by 0.1%.
· Higher oil production in the USA along with weaker demand and higher inventories (above the average).
· Week-over-week increase in oil inventories.
· Progress in the nuclear talks between the International Atomic Energy Agency and Iran.
Bullish factors:
· Improved economic readings cause optimism concerning the prospects of the global economy.
· The OPEC has reduced its oil production by 1.7%
· Geopolitical factors – tensions in the Middle East.
There is no seasonality in February.
Despite higher oil inventories, oil prices won’t fall, being under the influence of geopolitical risks.
According to the Commodity Trading Department of , oil price are likely to keep consolidating within a relatively narrow price range. The volatility is minimal, the situation is controversial and uncertain, so traders seem to abstain from trading until the situation clarifies.
