In the previous sections of this edition of the Market Overview, we presented the demand and supply outlook for platinum and palladium. In that part, we would like to analyze the potential benefits of adding these precious metals into the investment portfolio.
Crude oil prices must find new balance as global oil stock piles are falling against surging global demand and an increasing amount of geopolitical risk. Russia and Venezuela are the hot issues, with Iran and North Korea lurking in the background.
Who says that the U.S. oil supply picture is not getting in balance? Crude oil supply in the United States fell by 7.2 million barrels, down more than 50 million barrels since the end of March. It would have been more than 60 million barrels if it were not for the reclassification of oil released from the Strategic Petroleum Reserve. That puts supply at the lowest level this year and 7.1% below last year. U.S. crude production faltered last week, a sign that U.S. shale producers are getting wobbly. Y
Oil prices surged even before the American Petroleum Report (API) reported another massive crude oil crude withdrawal. The 10.23-million-barrel draw, if confirmed by the Energy Information Administration, it means that U.S. oil supply is down almost 55 million barrels since the end of March, even as the Strategic Petroleum Resave added over 13 million of barrels of oil into the marketplace. The API brings the total inventory for crude oil in 2017 to a net draw of 7.534 million barrels, the first net draw for 2017 since January according to Oilprice. So we see that OPEC and non-OPEC cuts do matter. As I told Marketwatch, the API reported crude supply draw erases the myth that shale can offset OPEC and non-OPEC cuts barrel for barrel.
While the oil markets are attempting to maintain gains following the latest OPEC meeting, I remain unconvinced whether the outcome to the gathering actually means anything for the price of oil in the long run.