It looks like crude oil is consolidating for another leg up as it shakes off political uncertainty in Germany--one of the reasons we pulled back yesterday. Market chatter has the Nymex delivery point falling at least one million barrels and some say the drop could be more than two million barrels.
The Energy Information Administration (EIA) reported a more supportive snapshot of petroleum supply and demand that the American Petroleum Institute (API) reported, and while the report was not as bullish as pre-API report expectations from a seasonal standpoint it was supportive.
After being extremely overbought with a record amount of hedge fund and large speculators long caused a sell-off after a questionable report from the International Energy Agency’s, Traders hoping that the American Petroleum Institute weekly supply report would perhaps add some clarity only added to the confusion. In a major mixed bag of a report, the API reported massive and unexpected 6.513 million barrels increase in weekly supply.
It seems that OPEC and the International Energy Agency live in different worlds when it comes to projecting future energy demand. While OPEC in their monthly report expects to see a larger oil supply deficit in 2018, the International Energy Agency (IEA) sees the appetite and an oil market oversupplied in the first half of 2018.