Additional support from surprising decline in US crude oil stocks reported by API

The American Petroleum Institute reported yesterday evening that stocks had decreased by 3.1 million barrel week-on-week in the week to 11 September.

However, the slight increase in price of the WTI October contract, which is still being traded, shows that a surprising decline in US crude oil stocks has lent additional support.

In its Drilling Productivity Report, which it published at the beginning of the week, the US Energy Information Administration (EIA) had predicted a further month-on-month fall in shale oil production by 80,000 barrels per day in October.

If this turns out to be the case, the key shale plays in October would already be producing 350,000 barrels per day - or 6.3% - less than at their peak in April. In our opinion, the falling US production will drive a lasting price recovery in the medium term.

"The official EIA inventory report will paint a clearer picture of the situation at the current edge in the US when it is published this afternoon", says Commerzbank.