Crude oil prices are slightly higher today - both WTI and Brent are up slightly. Yesterday, the commodity managed to shrug off an unexpected build in US crude inventories according to US EIA data. While the consensus estimate called for inventories to fall by 2.4m barrels, the actual figure was +2.2m barrels instead.
As we have written before, crude oil traders continue to ignore rising US production as end-user demand remains strong. Instead, crude oil prices have been more heavily influenced by supply-related concerns. Production in Venezuela has fallen by almost 1m barrels per day since early 2016 thanks to political instability in the country. The likelihood that Trump will re-impose sanctions on Iran could remove another 1m barrels per day from the market. Ahead of Trump's decision (May 12), crude oil prices are likely to remain supported. While earlier news headlines suggested that French President Macron's pitch to Trump had some possibility of success, this is looking less likely today. Our short-term and medium-term outlook on crude remains bullish.
WTI is currently trading above $68.20. Brent crude is currently above $74.20.
Looking at US crude oil stocks, the most recent EIA figures (April 25) showed rising crude oil stocks and rising gasoline inventories. Crude oil inventories rose (+2.2m vs. -2.4m expected). Gasoline stocks were up (+0.8m vs. -1.0m expected) while distillate stocks (-2.6m vs. -1.7m expected) were down. Looking at reactions in markets, crude oil prices managed to strengthen following the EIA report.