Thomson Reuters Markets
Oil prices continued to decline Wednesday morning on the back of lower demand growth expectations from the IEA. Crude benchmarks have lost a cumulative 3% this week as last week’s gains have evaporated, solidifying our views that a large part of the recent rally has been speculative.
The IEA has trimmed the outlook on oil demand growth for 2017 and 2018 by 100,000 bpd respectively. The agency now sees demand for oil expanding by 1.5 million bpd in 2017 and 1.3 million bpd in 2018 as rising prices limit incentives.
US crude and gasoline stockpiles rose last week, while distillate inventories drew, according to an oil & gas body. Crude inventories rose by 6.5 million bbls the previous week, compared to analyst expectations for a drop of 2.2 million bbls. Refinery runs declined by 289,000 bpd, while crude imports rose by 652,000 bpd to 8.1 million bpd.
Gasoline stocks rose by 2.4 million bbls, while a Reuters poll had pointed to a 919,000 bbls decline. Distillate stockpiles fell by 2.5 million bbls, compared to a projected 1.3 million bbls drop.
Thomson Reuters Oil Research estimates stockpiles of crude oil to have increased by 5.2 million bbls last week, as imports increased by 880,000 bpd to 8.26 million bpd, while exports were estimated to have declined by 160,000 bpd last week to stand at just above 700,000 bpd. Refinery input was assessed at 16.43 million bpd, up by 122,000 bpd w-o-w.
The Oil Research Team
Supply Chain & Commodities Research
