2:09 PM, Jun 21, 2017 — Oil futures prices were trading at levels last seen almost a year ago in recent trade after US government data showed an increase in domestic production of petroleum last week although overall US stockpiles of crude oil were lower for the second week in a row.
West Texas Intermediate (WTI) crude oil, the main US benchmark, was trading 2.9% lower at $42.27 per barrel recently, while Brent crude, the international gauge, was 3.1% lower at $44.59 per barrel. The last time Brent crude traded lower than this was in August 2016 while WTI crude last traded lower than its present level in July last year.
US domestic production of petroleum rose by 20,000 barrels per day to 9.35 million barrels per day in the week ended June 16, according to the Energy Information Administration’s (EIA) weekly oil report, published on Wednesday. The EIA’s data also showed that US inventories of crude oil declined by 2.5 million barrels to 509.1 million barrels last week. The drop surpassed the 1.7 million barrel weekly decline registered the previous week but was a lesser drop than the 2.7 million barrel drop which had been projected by the American Petroleum Institute (API) on Tuesday.
Total motor gasoline inventories fell by 0.6 million barrels, having increased by 2.1 million barrels a week earlier. Distillate fuel inventories rose by 1.1 million barrels having risen by 0.3 million barrels in the prior week, and propane/propylene inventories increased by 1.8 million barrels, having expanded by 2.4 million barrels a week earlier. Commercial petroleum inventories decreased by 1.9 million barrels, compared to a jump of 6.8 million barrels a week earlier.
Also feeding into trading sentiment was news of a change in positions for two of Saudi Arabia’s most senior officials. Home to one of the world’s largest reserves of oil and a key member of the Organisation of Petroleum Exporting Countries (OPEC), any changes to key government roles in Saudia Arabia stand to have potential implications on oil policy and, by extension, the price of oil.
Multiple news agencies reported on Wednesday that Saudi Arabia’s King had opted to promote his son, Mohammed bin Salman, to the role of crown prince, replacing Mohammed bin Nayef, his cousin, who was also removed from his post as interior minister. The Financial Times newspaper credited Mohammed bin Salman as having been the “driving force” behind Saudi Arabia’s plan to overhaul its oil-dependent economy, including the planned partial privatization of Saudi Aramco.
OPEC members collectively generate around one third of the world’s oil supplies and last month the bloc agreed to extend a curb on oil output for another nine months in an effort to ease the global glut in supply which had eroded prices severely in 2016 and the latter half of 2015.
Price: 6.49 Price Change: -0.04 Percent Change: -0.61