Crude oil remained lower over the weekend as the market digested the recent stock piles data and the supply concerns over Asia and the rest of the world. The commodity mostly traded lower from the previous week and as the market opened on Monday.
The oil market was still haunted by the global glut supply despite the projected easing of production of some oil kingpins in the near future. The stability of the commodity was still far from reality as the large amount of crude oil still remained in the storage tanks and a number of vessels at sea.
During the previous week, Brent crude hit two-month low while the U.S. West Texas Intermediate changed hands below $45 per barrel.
An oil analyst shared that the narrative of a balanced oil market (in the second half of 2016) has so far been an illusion. He explained that supply might actually increase in the near term with the further return of disrupted production and higher Middle East production, while demand growth is set to slow in emerging Asia.
In-line with this, the oil exports of Iran is reported to rally this month after retreating for a short time while the crude oil exports of Kuwait in China increased last month. Based on the data provided by the General Administration of Customs, the oil shipments of Kuwait in China went 300,000 bpd for the last two months.
Considered as the world’s second largest energy consumer, the total number of imports in China rallied 3.8 percent higher in June. Other exporters such as Saudia Arabia eased its shipments around 14.1 percent and Russia secured 8.6 percent up last month.
On the other hand, Libya’s output may increase by 320,000 barrels per day as the country is expected to open the export terminals again. An oil expert shared that the odds (of) restoring production may remain long, although the UN-backed unity government has made some progress toward combating Islamist militants to regain control of the oil export terminals necessary to provide an outlet for oilfield production.
Separately, market players also paid attention at the recent crude inventory reports. According to the latest report of the Energy Information Administration, the crude inventory declined 2.3 million barrels, higher than the expected 2.1 million barrel drop.
The EIA confirmed that the U.S. crude inventories have already reached 519.5 million barrels for this year, whereas the total U.S. crude and oil products soared 2.08 billion barrels while the gasoline stocks surged by 911,000 barrels.
It seems the market is still focused on the outcome of Brexit and to the central banks’ monetary policies that they don’t give much attention on the unceasing glut. Further, a lot of companies have been reporting their earnings, thus, the commodity market might continue to suffer.
With all these supply concerns, the oil futures would likely remain low in the next few sessions. The existing floating barrels at sea and the increase of output by the oil producers will make the commodity completely bearish.