Oil Prices Spike As EIA Confirms Inventory Draw

15 March, 2019, 16:09 | Author: Eric Barnett
  • The International Energy Agency

The report came on the same day that Secretary of State Mike Pompeo was due to meet with senior USA oil executives at the CERAWeek by IHS Markit conference in Houston to discuss boosting crude exports and advancing America's position as a global energy powerhouse, according to people with knowledge of the meeting.

International Brent crude oil futures were at $66.85 a barrel at 0341 GMT, up 18 cents, or 0.3 percent, from their last close.

The International Energy Agency said U.S. shale oil will make up 70pc of the extra global crude supply by 2024, eating into the market share of Opec and Russian Federation.

Oil prices have been offset this year by OPEC members' output cuts, which they agreed upon last year, while U.S. sanctions on the oil industries of OPEC countries Iran and Venezuela have also pushed supplies down.

Iran has lost $10 billion in revenue since U.S. sanctions in November have removed about 1.5 million barrels per day (bpd) of Iranian crude from global markets, a U.S. State Department official said on Wednesday.

Venezuela's opposition-run congress on Monday declared a "state of alarm" over a five-day power blackout that has crippled the country's oil exports and left millions of citizens scrambling to find food and water.

"Failures in the electrical system".

"When you have a better supplied oil market it enables us to accelerate our path to zero".

Gasoline stocks fell by 4.6 million barrels, almost double analysts' expectations in a Reuters poll for a 2.5 million barrels drop. Distillate inventories also increased by 195,000 barrels, compared to an expected draw of 1.858 million barrels for the week.

Crude production is set to continue expanding in the United States thanks to shale oil, with the country becoming a net exporter from 2021, according to a report released by the International Energy Agency (IEA) on Monday. Traders are looking for a 2.7 million barrel build, but expectations could change to reflect the API data as we approach the regular session opening and report time. US sanctions on Venezuela has further tightened markets.

"This shows Saudi Arabia's resolve to keep the oil market balanced by keeping oil supply tight", said Carsten Fritsch, an analyst at Commerzbank.



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