The US Energy Information Administration’s recent report suggests that the crude oil stocks are still high with a registered amount of more than 2 million barrels. This has terribly disturbed the US oil inventories. The global demand for oil is still on the lower side indicating a fall of 2 percent. Analysts globally had predicted a decrease in oil quantity by more than 450000 barrels but it turns out to be otherwise. Oil futures reported a loss to the energy information administration. Another commodity on a rise is Gasoline.
The report came as a surprise to many including John Kilduff. John is a partner at the NYC based Again capital LLC. The report also surprised the industry with its report on gasoline. This has made the energy information administration change its oil forecast for 2019. The US China trade war is still on and the fluctuating oil demand is making them weigh the prices. Trump administration is ready to hold up a deal with China. There was a pull back for European shares as well after them being high for three weeks consecutively. This was also a result of trade frictions with China. Since the fourth quarter of July, Hedge fund managers are also settling oil positions.
The petroleum exporting countries’ organization is scheduled to meet in June. This highly anticipated meeting will reveal if the global oil giants will implement supply cuts or not. Countries are limiting their oil output so the prices pop up. Russia is one of the most prominent country to do it. Apart from Russia OPEC countries are also limiting their output. But, there is a possibility of OPEC rolling over the cuts as suggested by Goldman Sachs. Iran producing more oil could be a reason for this. UAE’s energy minister also suggested that OPEC countries possibly would agree to continue cutting production.