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What’s next? – OIL 15.03.18

Mar 15 2018, 01:35 PM (+06) | Fortfs.com

Oil prices were lower in Asian trading hours on Thursday, with market participants digesting the latest inventory data from the US and looking ahead to the weekly oil rig count on Friday.

 

The US West Texas Intermediate crude contracts were up 0.02 percent to $60.97 per barrel as of 06:10 GMT. Meanwhile, Brent futures dropped 0.02 percent to $64.88 a barrel.

 

Crude benchmarks settled in green territory on Wednesday as a drop in gasoline stockpiles offset an increase of crude supplies for a third week in a row.

 

The US Energy Information Administration said crude stocks jumped by 5.022 million barrels (mb) in the week ended March 9, surpassing expectations for a 2.023 mb build.

 

According to the latest report, stockpiles of gasoline - one of the products crude is transformed to - declined by 6.271 mb, against expectations for a moderate reduction of 1.176 mb.

 

Also, distillate products - the category that includes diesel and heating oil - plunged by 4.36 mb, while economists had forecasted a 1.519 mb reduction.

 

These figures helped to support crude benchmarks despite a downbeat monthly report by the Organization of the Petroleum Exporting Countries (OPEC). Members of the oil cartel almost doubled its estimate on non-OPEC production for 2018.

 

Forecasted production for non-OPEC nations in 2018 is now standing at 1.66 million barrels per day (bpd), up by 280,000 bpd. Investors are mainly worried about the United States, where producers seem to be ramping up output to take advantage of higher prices.

 

"Combined with our expectation for strong oil demand growth and high OPEC compliance, we reiterate our constructive forecast on oil prices with global inventories set to fall further below their 5-year average levels through 3Q18," Goldman Sachs wrote in a note.

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