Production and stocks:
According to the recent weekly report published by the EIA, the U crude oil stocks increased by 1.1 million barrels during the week that ended on February 22nd. Analysts had anticipated an increase by 2.5 or 2.6 million barrels.
Since early 2013, the stocks have boosted by 17.6 million barrels. As of February 22nd, they are estimated at 377.5 million barrels. This is the 7-month high. For comparison sake, a year ago the stocks were equal to 45 million barrels.
Major market drivers:
Bearish factors:
· Higher crude oil stocks
· The strengthening of the US Dollar index
· The US oil production is around 17-month highs and keeps growing.
Bullish factors:
· Better economic performance in the USA and China.
· China’s higher oil import.
· More positive sentiment over the eurozone’s economic prospects for the second half of 2013.
· The OPEC has cut its oil production by 1.7%.
· Tensions in the Middle East.
In terms of seasonality, oil prices usually go flattish in March:
The chart below, courtesy of , reflects the current state of affairs in the market of crude oil. Technically, the bullish pattern is broken. A bearish channel is unfolding and attended by higher volatility.
