Record-high Chinese diesel exports in September

At around $48 per barrel, the oil price today is trading at roughly the same level as it was 24 hours ago. US crude oil stocks rose by over 8 million barrels last week, which is considerably more sharply than had been expected. 

Admittedly, the increase was partly "offset" by the marked reduction in oil product stocks, as some refineries in the US are still closed for maintenance work. Nonetheless, many market participants are likely to have been surprised by the lack of any negative price response. 

It is assumed that the market had already anticipated a sharper increase following Tuesday's API report, and for another thing sentiment on the oil market already appears to be so negative that additional "negative news" is needed to justify any further price fall. 

"The leading oil traders are also pessimistic, none of them envisaging any oil price rise above $60 per barrel in the coming year. One reason is doubtless the buoyant supply of oil products worldwide, especially middle distillates", says Commerzbank. 

China for example exported 1.11 million tons of diesel in September, which is nearly five times as much as it did last September. However, this could be regarded as the "flip side" of the solid gasoline demand in China. 

In the US too, (implied) gasoline demand remains very high for this time of year, at just under 9.7 million barrels per day. 

The development of US oil production will be the key to the future performance of oil prices. No change to US oil production was reported by the DOE last week.