OPEC builds case for keeping supply cuts

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OPEC builds case for keeping supply cuts

The trade volume of petroleum in the United States includes crude oil, petroleum products, and natural gas plant liquids, according to EIA. This level is the lowest level of net petroleum trade (imports minus exports) since 1967.

"The result has been a growing role for the United States in world petroleum trade", said EIA. Opec›s report said oil inventories in developed economies were above the five-year average in January.

Data released by the Energy Information Administration (EIA) this morning showed that crude oil inventories declined by 3.86 million barrels in the week to March 8, as against forecasts for a 2.6 million increase. Granted, crude oil looks extraordinarily bullish but it isn't exactly free and clear quite yet.

USA crude oil production also dipped, falling by 100,000 barrels per day (bpd) to 12 million bpd. A week earlier, crude inventories had increased by over 7 million barrels, more than thrice the expected rise.

This increase in price was mainly attributed to an announcement from the Energy Information Administration on Wednesday, reporting that US crude supplies fell by around 3.9 million barrels last week.

EIA: The US imports and exports substantial volumes of petroleum
Tight Market Fears Cause Crude to Climb Again - with $60-Plus Viewed as Inevitable

At the same time, USA refinery runs have been setting record highs.

The U.S. crude output downward revisions is set to ease worries that the glut of supply in the global oil market, coming mostly from the U.S., will be less than anticipated.

Iraq exported on average around 3.6 million bpd in January-February, and 3.7 million in December. Distillate and gasoline exports have increased, particularly to countries in the Western Hemisphere. It is because of this that I think that although we are bullish, you are probably going to continue to buy short-term pullbacks more than anything else in this market.

OPEC may extend production cuts as demand is expected to go down this year.

The OPEC Reference Basket (ORB), a weighted average of prices for petroleum blends produced by the cartel's members, rose in February for the second consecutive month, increasing by about 9 percent, or 5.09 US dollars, month-on-month to average 63.83 USA dollars per barrel, said the report.

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