Crude oil starts getting cheaper again. The negative tendency was set yesterday, when Brent and WTI oil dropped down to 55,11 dollars per barrel and 53,16 dollars per barrel respectively.
According to mass media, the key reason for this downtrend in the market of crude oil is unexpectedly high crude oil inventories in the USA. After the corresponding report was released, oil prices started going down almost instantly. The report says that the U.S. crude oil inventories increased by 0.5% or 2.3 million barrels up to 485,4 million barrels over the reporting period. Experts had predicted the opposite dynamics – a drop by 2,5 million barrels down to 480,69 million barrels, which is one of the reasons why the market reacted this way.
At the same time, the production of crude oil in the USA shrank by 0.11%. The current daily production volume is 8,786K barrels or 10K barrels less than before. The American inventories of gasoline shrank as well. This was a 0.65 drop (by 1.3 million barrels) down to 228.7 million barrels. Once again, experts had failed to predict the direction of the change – while they predicted the gasoline inventories to increase by 1.42 million barrels, they actually dropped. The same story was with distillates inventories. They shrank by 2.4 million barrels (1.6%) down to 153,5 million barrels.
Despite the fact that the inventories of gasoline and distillates dropped, this failed to prevent the crude oil futures for February delivery from dropping in price. For those of you who don’t know, the U.S. crude oil inventories report is one of the key indicators affecting short-term oil prices. However, OPEC’s decisions on oil production affect the market even more and have a long-lasting impact on the market. For now, OPEC is determined to cut oil production in order to back higher oil prices.
