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.
There is a temptation to attribute the recent rise in oil prices to just the uncertainty of the political purge that we have seen in Saudi Arabia, but if you think that you are missing the larger point.
It seems the move by Saudi Arabia’s Crown Prince Mohammed bin Salman to arrest members of the royal family and their business associates in a corruption crackdown is proving to be wildly popular among the Saudis young population.