API reports major build while market awaits EIA report

Both Brent and WTI remains elevated thanks to geopolitical concerns despite weakness in the emerging markets, despite increasing supplies from OPEC, Russia, and the United States. However, came under intense selling this week, as investors shun off risky assets. The declining inventory is providing the necessary support. WTI is currently trading at $72.2 per barrel and Brent at $9.6 per barrel premium to WTI.

Key factors at play in the crude oil market –

• According to Reuters, OPEC production rose by another 220,000 barrels per day in August to 32.79 million barrels per day.
• According to Reuters’ survey, the OPEC production rose by 90,000 barrels per day in September. Argus survey suggests OPEC production, up by 310,000 barrels per day.
• Trump is pressing Saudi Arabia to increase oil production by almost 2 million barrels per day. Saudi Arabia is likely to comply once the supplies from Iran starts drying up due to sanctions by the U.S.
• The U.S. reportedly asked allies to stop importing Iranian oil from November this year. Secretary Mike Pompeo has visited India last week to persuade, which is the biggest buyer of Iranian crude oil.
• EU, alongside Iran, Russia, and China have created a special purpose vehicle (SPV) to bypass the U.S. sanctions for companies operating in Iran.
• Venezuela in crisis as oil production declined to 1.235 million barrels per day in August as per OPEC report. According to Platts, the production declined further in August to 1.22 million barrels per day. The country is struggling to cope up with the introduction of a new currency linked to the country’s crypto-currency Petro. Reuters’ survey suggests Venezuela production at 1.25 million barrels per day.
• EIA projects U.S. crude production to increase to 12 million barrels per day by end of 2019 and U.S. would become the single largest producer by next five years.
• Current U.S production at 11.1 million barrels per day.
• API reported a major build of 9.75 million barrels of crude oil. Gasoline saw a build of 0.042 million barrels per day.

Today’s inventory report from the US Energy Information Administration (EIA) will be released at 15:00 GMT.