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Oil gives up most of last week’s OPEC + gains after EIA’s surprise build

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Oil prices continue to drop from 12-week highs after the EIA weekly inventory report showed a small surprise build of 822k barrels, a recently growing trend with US stockpiles.  The overall report was very bearish as demand fell off a cliff and total stockpiles climbed to the highest level in seven months.  Today’s initial selloff eliminated a good part of the Saudis surprise cut announcement from last week.  With a steady decline with rigs, its no surprise US crude production fell 100K from the record highs to 12.8m bpd.   Refinery utilization also came down 1.3ppt, a miss of the expected rise of 0.7ppt, implying demand could be decreasing.

Oil remains vulnerable despite the OPEC + promise for deeper cuts as today’s oil report implies domestic demand is dwindling, the overall global demand outlook remains uncertain and with the backdrop that the first half of the year will also see stronger oil output from Norway, Brazil and Guyana.

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Ed Moya

Ed Moya

Contributing Author at OANDA
With more than 20 years’ trading experience, Ed Moya was a Senior Market Analyst with OANDA for the Americas from November 2018 to November 2023. His particular expertise lies across a wide range of asset classes including FX, commodities, fixed income, stocks and cryptocurrencies. Over the course of his career, Ed has worked with some of the leading forex brokerages, research teams and news departments on Wall Street including Global Forex Trading, FX Solutions and Trading Advantage. Prior to OANDA he worked with TradeTheNews.com, where he provided market analysis on economic data and corporate news. Based in New York, Ed is a regular guest on several major financial television networks including CNBC, Bloomberg TV, Yahoo! Finance Live, Fox Business, cheddar news, and CoinDesk TV. His views are trusted by the world’s most respected global newswires including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Seeking Alpha, The New York Times and The Wall Street Journal. Ed holds a BA in Economics from Rutgers University.
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