In less than two weeks, Oil was reported to retreat the most despite of concerns that OPEC’s deal to prolong oil cuts may push up U.S. shale activity to further stages in the market.
According to the Energy Information Administration’s report, a total count of 5.6 million barrels were produced in crude oil inventories for the week to the first of December, closely within range of the American Petroleum Institute’s barrel draw prediction of 5.481 million barrels while analysts expected a 3.507 million barrel draw.
Along with this news, was the exceptional API report that showed an astonishing gasoline inventory build of 9.196 million barrels. Way out of range from the predicted build of only 1.145 million barrels by analysts. A total large build of 6.8 million barrels was confirmed by the Energy Information Administration.
Last week’s average of U.S. crude oil imports were at 7.2 million barrels per day, marking a decline of 127,000 barrels per day in comparison to the previous week. As stated by the EIA, a number of 17.2 million barrels of crude per day were processed by the refineries, generating 9.8 million barrels of gasoline per day, falling from the 10.2 million barrels a day from the previous week.
Prices are seemingly not affected by OPEC’s move to prolong the OPEC production oil cuts until the end of the year 2018, since the API reported the outstanding amount of gasoline inventory build.
Brent crude benchmark along with West Texas Intermediate (WTI) saw a sustained drop in the after hours of trading, landing at $62.60 and $57.36 at about 9:00 p.m. EST. The benchmarks maintained their falling movement overnight and were trading at around 7:42 a.m. at $62.21 and $56.90.
According to a Reuters poll which was composed of 30 analysts and economists, in spite of the recent price drop, the OPEC, along with other non-OPEC nations, production cut extension up until the end of the year 2018 maintains to send strong indications of a swift rebalancing of the oil market and can push WTI prices up to an average of $54.78 per barrel in 2018, more than the previous expectation of $52.50.