U.S. Crude Oil Inventories Jump, OPEC Supply May Be on the Rise
Published Apr 24, 2019 10:32AM ET
Updated Apr 24, 2019 11:32AM ET
Investing.com - U.S. crude oil inventories surged more than expected last week, according to official government data released on Wednesday, although the report also indicated that OPEC may have already increased supply.
WTI futures fell 51 cents, 0.77%, to $65.79 in midday trading, while London Brent futures lost 12 cents, 0.16%, to $74.39.
The Energy Information Administration said in its regular weekly report that crude oil inventories rose by 5.48 million barrels in the week to April 19.
Although that was five times larger than the consensus forecast, Investing.com senior commodity analyst Barani Krishnan said that the key takeaway from Wednesday’s report comes from imports, which rose by 1.2 million barrels.
“This tells me that more oil is already coming out of OPEC, regardless of what the Saudis say, and this tees up nicely with what the International Energy Agency said yesterday that the market is adequately supplied,” he said.
“Expect more volatility in weekly EIA stats hereon as OPEC members try to capitalize on current high prices and the vacuum in Iranian oil supply by discreetly adding to their own exports, despite the Saudi stance that there will be no preemptive hike in production,” Krishnan added.
Despite Wednesday’s losses, crude has rallied this week, with WTI still on track for gains of more than 3% after the U.S. said on Monday it would end all exemptions for sanctions against Iran, demanding countries halt oil imports from Tehran starting in May or face punitive action from Washington.
Krishnan noted, however, that the all-out ban on Iranian oil may have placed Saudi Arabia in a precarious position, caught between U.S. President Donald Trump and Russia.
“This Saudi double strategy of appearing to meet Trump’s need for lower oil prices without really meeting them and persuading the Russians to withhold production increases for as long as possible is unlikely to work for long,” he warned.
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Written By: Investing.com
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