API reports draw while market awaits EIA report

Both Brent and WTI is heading higher as the focus shifts on geopolitical tensions after OPEC meeting. WTI is currently trading at $67.3 per barrel and Brent at $4.2 per barrel premium to WTI.

Key factors at play in the crude oil market –

• According to Reuters, OPEC production is up 0.32 million barrels per day in June as Saudi Arabia pumped 0.7 million barrels more. OPEC production reached 32.32 million barrels per day.
• OPEC numbers also suggest production rise of 0.32 million barrels per day with Saudi production up 0.42 million barrels per day.
• Trump is pressing Saudi Arabia to increase oil production by almost 2 million barrels per day. Saudi Arabia is likely to comply.
• OPEC announced full compliance to 100 percent of the deal from current 147 percent.
• The U.S. reportedly asked allies to stop importing Iranian oil from November this year.
• Libyan faces political crisis as control battle for oil field intensifies. Production drops to 0.6 million barrels in June.
• According to OPEC MOMR, the production was 31.87 million barrels in May, up 35,000 barrels from April. OPEC production was 31.93 million barrels per day in April, up 12,000 barrels from March, according to OPEC’s monthly oil market report.
• Russia and Saudi Arabia have signaled that they might ease the production cap by a million barrels per day after Brent reached above $80 per barrel and importers like India urged OPEC and Russia to take measures.
• President Maduro reelected as the president of Venezuela. This increases the risk of further sanctions on the country’s oil exports. Venezuela has told foreign firms that it would not be able to meet the supply contracts.
• President Trump moved the United States out of the Iran nuclear deal and promised to impose the harshest of sanctions.
• U.S. State Secretary Mike Pompeo laid out conditions for a new agreement with Iran.
• Violence in Gaza could spread across the Middle East.
• Saudi oil minister said that the world has the capacity to absorb higher oil price. Saudi Arabia plans to target $100 per barrel oil.
• Saudi Arabia’s suggested that Russia and Saudi Arabia is looking to form a supply cartel alliance that would last not for years but decades.
• Venezuela in crisis as oil production declined to 1.44 million barrels per day.
• EIA projects U.S. crude production to increase to 11. 4million barrels per day by end of 2019 and U.S. would become the single largest producer by next five years.
• Saudi corruption crackdown yielded $106 billion according to the country’s attorney general.
• Current U.S production at 10.9 million barrels per day.
• The oil market is in backwardation, both Brent and WTI.
• API reported a build of 0.629 million barrels of crude oil. Gasoline saw a build of 0.425 million barrels.

Today’s inventory report from US Energy Information Administration (EIA) will be released at 14:30 GMT.