- The most dramatic event in the oil market last week occurred in Canada, not at the OPEC meeting in Vienna, according to Goldman Sachs (NYSE:GS) analysts who say an outage at the Syncrude oil sands facility could lead to a shortage in North America for all of July and shrink stockpiles at the Cushing, Okla., storage hub.
- Goldman says the outage will support American oil prices while the OPEC deal to raise production may weigh on Brent crude and lead to a 360K bbl/day shortage for July, which could prompt a further drawdown in Cushing inventories that already have dropped for five weeks with the start of the summer driving season.
- “With the global market pricing to pull crude out of the U.S., this loss of U.S. supplies will exacerbate the current global deficit, making the increase in OPEC production all the more required,” Goldman writes. “And while Saudi is already ramping up exports, these will not be delivered until August with June stock draws already accelerating.”
- In today's trade, WTI -0.6% at $68.14/bbl, Brent -1.8% at $74.19/bbl.
- ETFs: USO, OIL, UWT, UCO, DWT, SCO, BNO, DBO, DTO, USL, DNO, OLO, SZO, OLEM, WTIU, OILK, OILX, WTID, USOI, USOU, USOD, UBRT, DBRT, OILD, OILU, USAI
- Now read: Crude Oil Keeps On Going
Original article