US crude oil inventories recorded a surprisingly sharp decline of 11.5 million barrels final week, Commerzbank’s commodity analyst Carsten Fritsch notes.
WTI value is catching up with the worth of Brent oil
“This was the most important weekly drop in inventories in virtually a yr. The drawdown was fuelled by a big drop in internet imports of 1.8 million barrels per day, as imports fell and exports rose. The latter is outstanding as a result of the worth low cost of WTI towards Brent has narrowed noticeably just lately, which means that US mild oil has turn out to be much less aggressive by way of value.”
“Initially of the week, the distinction was solely $2.5 per barrel, the bottom degree this yr. It’s subsequently questionable whether or not exports will be capable to preserve their excessive degree. The discount in inventories is subsequently additionally prone to be partially reversed.”
“US crude oil inventories are at present 10% beneath the 5-year common, which signifies a decent provide scenario within the USA. In Cushing, the supply level for WTI, the deviation is as excessive as 40%, which signifies that the WTI value is catching up with the worth of Brent oil.”
