Global oil stocks shrinking on robust demand: IEA

Gladys Abbott
September 14, 2017

At the Multi Commodity Exchange, crude palm oil for delivery in September month traded higher by Rs 2.90, or 0.53 per cent to Rs 550 per 10 kg in business turnover of 232 lots.

The global surplus of crude and stocks over the five-year average fell to 190 million barrels.

The prominent financial institution, Goldman Sachs also warned that the oil demand may dwindle down and fall to an expected 900,000 barrels per day by September and a whopping 300,000 barrels per day in October after the continued Hurricane attacks.

October West Texas Intermediate crude for October delivery added $1.07, or 2.2%, to settle at $49.30 a barrel on the New York Mercantile Exchange, for the highest finish since August 9.

Global crude oil prices improved, as OPEC and non-OPEC countries continued to conform to voluntary output adjustments and USA stocks declined further, OPEC said.

OPEC's crude output fell in August for the first time in five months on renewed turmoil in Libya, with the cartel's production decreasing by 0.21 million bpd to 32.67 million bpd.

New Delhi, Sep 14 Crude palm oil prices advanced by 0.53 per cent to Rs 550 per 10 kg in futures trading today driven by strong demand in spot markets.

U.S. Energy Information Administration (EIA) data showed a build of 5.9 million barrels of crude last week, exceeding expectations. The demand growth of the Organization for Economic Cooperation and Development (OECD) continues to be stronger than expected, particularly in Europe and the United States. "WTI has been lagging [Brent] of late due to the bearish impact of Hurricane Harvey on refining activity", but played catch up Wednesday.

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USA gasoline stocks slumped 8.4 million barrels, the largest one-week decline since the EIA started recording the data in 1990, while distillate stocks fell 3.2 million barrels.

Oil in NY has closed below $50/bbl since July as efforts to drain a global glut by the Organization of Petroleum Exporting Countries and partners including Russian Federation confront rising shale output.

The re-balancing of oversupplied world markets is continuing, the agency said.

This week's gains came despite data showing a big build in USA crude inventories after Hurricane Harvey.

Based on secondary sources, OPEC crude oil production in August 2017 stood at ~32.8 million barrels per day-a decline of 79,100 barrels per day compared to July 2017.

"Without inventory normalization, there can be no sustained price recovery", they wrote.

The US EIA on Tuesday revised its 2017 and 2018 US output forecasts lower to reflect, in part, the effects of Harvey.

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