Published: Fri, March 09, 2018
Markets | By Rosalie Gross

Crude Oil Below 'Head and Shoulder' Neckline Level

Crude Oil Below 'Head and Shoulder' Neckline Level

The EIA reported late on Wednesday that U.S. crude inventories rose by 2.4 million barrels in the week to March 2, to 425.91 million barrels, less than the 2.7 million barrel increase analysts had forecast.

IEA says the pipeline constraints have increased the forward discount for Canadian production, adding $3.75 a barrel in 2018, and $2/Bbl in 2019 to the forward differential curve between Western Canada Select and WTI since its last report a year ago, the Canadian Press reported.

Oil prices steadied today, supported by healthy demand, after falling the previous day under pressure from record United States crude production and rising inventories.

The main culprit for a slowdown in U.S. shipments to Asia is likely the narrowing discount of benchmark U.S. West Texas Intermediate (WTI) to Brent, the light crude grade used as a price marker for the rest of the world.

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Brent crude futures were at $64.49 per barrel at 0100 GMT, up 15 cents, or 0.2 per cent, from their previous close. Cohn, a free trade advocate and former president at Goldman Sachs, had opposed Trump's plans for the proposed tariffs on aluminum and steel. Since the start of the year, there has been only one week featuring a decline in gasoline stockpiles, while the total build since then stood at 17.8 million barrels.

Nevertheless, the USA stands to dominate global oil markets for years to come, satisfying 80 percent of global demand growth to 2020, the International Energy Agency said Monday.

While crude has mostly stayed above $60/bbl this year as OPEC and its allies continue to cut production to drain a global glut, investors worry that record US oil output could thwart the group's efforts.

Tanker rates from the United States to Asia have also been rising recently, with the cost of shipping a tonne of oil from Houston to China TC-HOU-DLC assessed by Thomson Reuters at $29.01 on March 2, up from $18.44 at the start of February and $16.79 in late September past year. When asked whether the Organization of Petroleum Exporting Countries was anxious about further US crude output growth, OPEC Secretary General Mohammad Barkindo said he wasn't and pointed to robust demand. Oil imports in Asia are expected to grow by 3.5 million barrels a day through 2023. Output is seen at 100.62 million barrels a day, up from 100.43 million previously, with demand at 100.2 million, compared with 100.23 million. And the set to become part of the top five global crude exporters, according to consultant Wood Mackenzie Ltd.

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