Tranquility in the oil market

Posted 16 February, 2017

Today, during the morning session oil prices have been trading in the usual range of the few last weeks. Investors continue to observe on the reduction of OPEC and other large countries-producers, as well as on increasing of the US oil inventories. Crude oil futures WTI with March delivery rose by $0.05 (0.1%) to $53.13 per barrel. European Brent for April delivery rose by $0.06 (0.1%) to $55.80 per barrel.

According to the latest data, oil producers (OPEC and other producers) after the recent agreement have showed a serious decline in production for the first time for more than 10 years. During the first month of the new year, production decreased by 890 thousand barrels per day to 32.12 million barrels per day. Thus, reduction of production is performed by 90%. Report from the US Department of Energy (EIA) showed that crude oil inventories in the US for the last week rose by 9.5 million barrels, it is a new record - 518.0 million barrels. Gasoline stocks rose by 2.8 million barrels and reached maximum level of 259.0 million barrels.

Over the past few months, prices in the oil market have been trading in a narrow range, slightly less than the $55 per barrel. Oil market is in an unstable state due to the recovery of shale oil production in the US, as well as because of decrease OPEC and other producers. Number of drilling rigs increased by almost 7% since mid-2016. This level corresponds to the end of 2014, when huge volumes of the American shale oil production staged a collapse in the world market.

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16 February, 2017 16:00

← Rockefeller Treasury Services, Inc. Analytics | 16 of February

Once a corrective pullback gets started, and remember this one was delayed, it takes a big gun to stop it. Today’s data plate is skimpy--Jan housing starts and permits, the Feb Philly Fed survey and the usual weekly jobless claims. None of these is a big gun, so we must expect the dollar pullback to persist.

Rockefeller Treasury Services, Inc. Analytics | 16 of February

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14 February, 2017 17:26

Rockefeller Treasury Services, Inc. Analytics | 14 of February →

We want specifics from Yellen but the probability of getting any is practically zero. Everyone will be seeking the barest of whispers of a hint that March might be a real possibility or that the market is wrong to say two when the Fed is saying three. At a guess, Yellen will be even more restrained and cautious than usual, if that’s possible, because this time she faces the Senate in Republican control for the first time.

Rockefeller Treasury Services, Inc. Analytics | 14 of February
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