Chances of success for the effort to curb global oil supply are getting thinner by the day. OPEC members have a rift on share cut distribution already, add to that inviting new members like Iran, Iraq, Nigeria, and lately Russia made things worse in terms for assigning production. Iran and Iraq wants to be excused from the party, and Russia is giving vague signals on OPEC-final-deal decisions. Then there’s Brazil, whose Oil and Gas Secretary this weekend delivered yet another blow to the cartel that once held the reins to the global oil price trends.
Over the week, Marcio Felix told media in Vienna that
Yes, the Brazilian production is increasing… I do not have the exact figures, but the production in Brazil will grow in the next few years, we have such plans.
Felix attended a meeting between OPEC and a number of non-OPEC producers, but as the minister noted, only “as observers”. This wasn’t OPEC’s goal, however. OPEC wanted to convince external producers to take part in the freeze/cut, to make it more meaningful. That effort failed.
The American Petroleum Institute said on Tuesday that crude oil inventories last week surged 9.3 million barrels for the second straight weekly build under its estimates and well above market expectations. Gasoline inventories dropped 3.6 million barrels last week, while distillate fell 3.1 million barrels, a fourth straight drop. Cushing recorded a build of 1.0 million barrels for the week.
The atmosphere surrounding crude oil price suggests that prices to be expected to extend losses with no OPEC-cut-deal on the horizon and US efforts seeking lower price suggests that US hopes may come true after all today depending on their crude oil inventories at 2:30 PM GMT.
Trend: bearish
First resistance: R1 47.07, R2 47.73, R3 48.30, R4 49.00
First Support: S1 45.86, S2 45.21, S3 44.47, S4 43.81
Remark: Bearish trend is dominating. Alternative scenario in case of negative US crude inventories, this may create a shortage, hence demand and trend shifting opposite.
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