US Crude Oil inventories rise at a slower pace of 2.29 million barrels for the week ending March 25th, 2016
Summary:
Crude Oil prices were showing signs of reversing some of the losses from the past five days but failed after giving back the gains and instead closed lower. US Department of Energy’s weekly Crude oil inventory report for the week ending March 25th showed a buildup of 2.29 million barrels against forecasts of 3.1 million. The slower pace of inventory comes after the previous week notched a massive 9.4 million in build up, according to data released by the Energy Information Administration yesterday. Previously, the American Petroleum Institute’s gauge of inventory showed a build of 2.6 million barrels, which also missed forecasts of 3.2 million barrels. Cushing saw a drawdown of 319k barrels while Gasoline inventory fell -1.94 million barrels.
On the geopolitical side, earlier this week, news reports surfaced that Saudi Arabia and Kuwait were restarting production from the Khafji Oilfield, which is expected to add 300,000 barrels per day. The reports raise questions on the level of commitment from the major oil producers who just last month discussed talks of freezing Oil production levels. The agreement, initially formulated in Qatar saw Saudi Arabia and Russia spearheading the idea and was later joined by other countries including Venezuela. Iran flip-flopped on the idea as the country remains adamant to increase Oil production to gain its lost market share. Major oil producers are expected to meet again in April to further the talks. WTI Crude Oil futures posted a steady decline following a strong rally which pushed prices to a 4-month high at $42.48, but Oil prices started to decline steadily since then.
