Forex Marketz Daily Forex News – Fully Markets Update
Crude Oil fell nearly seven percent yesterday after US Government data showed inventories for the week saw their largest gains since 2001. Saudi Arabia also showed record production for March. The supply glut continues and production is not waning.
Futures for the May crude contract plummeted $3.56 per barrel or 6.6 percent closing at $50.42. This erased all of its gains and is now down 5.4 percent for 2015. Brent Crude lost $3.30 per barrel and is down 4.8 percent in early Asian trading today.
US crude inventories shot up to 10.95 million barrels to a record high of 482.40 million for the week ending April 3. This is according to the Energy Information Administration (EIA). Analysts expected a build of only 3.4 million barrels.
This is a very bearish report for crude oil as inventories build rose sharply and we saw a rise in gasoline inventories as well. We saw inventory, for oil, at the key Cushing, Oklahoma hub surge by 1.2 million barrels. This was way more than expected. US crude imports were up by 1.2 million barrels at 7.7 million barrels per day. This is causing an inventory overload.
Gasoline inventories were up by 817K barrels. Analysts expected a drop of a million barrels as refiners are increasing capacity utilization. This sent gasoline futures down 9.19 cents to $1.768 per gallon.
This data came after the oil minister for Saudi Arabia, Ali al-Naimi said his country would not change the level of crude output. This leaves production at 10 million barrels per day after a record high of 10.3 million barrels per day in March.
Iraq and Libya have also increased output further adding to OPECs production. This came in at 31.5 million barrels per day last month alone. At these levels it is difficult to see a drop off in global inventory stock or even an increase in price. OPEC has to decrease production. Something the Saudis seem unwilling to do now.
