US oil inventories decreased by 2.6 million barrels
US oil inventories decreased by 2.6 million barrels
US oil inventories decreased: The American Petroleum Institute (API) announced yesterday,
Tuesday, April 6, 2021, that crude oil inventories fell by a relatively small 2.618 million barrels in the week ending April 2.
Analysts had expected a decline in inventories by 1.436 million barrels for this week.
As for the previous week, the American Petroleum Institute announced that oil inventories reached 3.910 million barrels, after analysts’ expectations for a much smaller increase of 107,000 barrels.
Weekly oil prices
Oil prices rose the day before the data was released as fears subsided in the market due to additional supplies
that may be brought to market if talks about the Iran nuclear deal ended with the lifting of US sanctions.
At midday on Tuesday, WTI was trading at $ 59.40, up (1.28%) for the day.
The benchmark Brent crude oil price rose to $ 62.79 a barrel, up (1.03%) on the day.
After the release of the data, the WTI crude oil index was trading at $ 59.45, a difference of $ 1 from last week.
The benchmark Brent crude was trading at $ 62.83 a barrel.
Energy production rates
As US oil inventories shrank, US oil production rose slightly,
reaching 11.1 million barrels per day in the week ending March 26,
according to the latest Energy Information Administration (EIA) data.
This is the second increase in several weeks.
The American Petroleum Institute reported a build-up of gasoline inventories by 4.553 million barrels for the week ending April 2,
after a fall of 6.012 million barrels in the previous week.
Analysts had expected a decline of 221 thousand barrels during the week.
As for distillate inventories, they witnessed an increase in stocks this week,
amounting to 2.810 million barrels for this week,
after an increase of 2.595 million barrels last week.
Cushing stock indexes fell by 84,000 barrels.
The Suez Canal traffic crisis resolution
The accumulating ships passed through the Suez Canal after the “Ever Given” ship,
which had been stuck in the canal and had strangled the passage for a week, was floated back up.
According to Egyptian authorities, the last 85 ships waiting in the canal passed through it on Sunday.
More than 400 ships have also passed through the canal since the container ship was floated back on March 29.
The stranded ship “Ever Given” is a 400-meter-long skyscraper-sized ship that was stuck in the narrowest path of the Suez Canal and caused disruption to the movement of ships heading north and south and inability to pass through the canal.
This has caused a build-up of ships waiting to pass through the canal,
as the Suez Canal handles 12% of world trade, including 9% of the crude oil traded by sea.
So oil prices immediately jumped and continued to rise as authorities said it could take weeks or even months to move “Ever Given” from the canal.
The specialists were able to re-float the ship within a week,
but the situation affected 10 tankers stuck in the canal carrying 13 million barrels of crude oil.
India is reviewing oil import contracts with Saudi Arabia
India is continuing its efforts to get rid of its oil dependence on the decisions of the Organization of Petroleum Exporting Countries (OPEC) by requiring its state refiners to review what it considers “loaded against the buyer” contracts with Saudi Arabia,
a senior Indian official told Indian media on Friday.
India has been upset, as it relies on imports for more than 80% of its consumption and whose imports from the Middle East only accounts for about 60% of OPEC’s oil supply management since the beginning of the year,
has also been dissatisfied with high oil prices that drive up imports and domestic inflation.
Although OPEC + decided on Thursday to gradually increase collective production by more than 1 million barrels per day over the next three months, India remains upset with its contracts with buyers in the Middle East.
The Indian official noted that the conditions of OPEC producers to sell their oil to India “are often loaded against the buyer.”
In recent weeks, Indian refiners have begun to shop in North and South America,
buying some grades of crude for the first time,
as the world’s third-largest oil importer looks to diversify its oil imports away from the Middle East.
It is estimated that India significantly boosted oil imports from the United States in February while reducing its purchases from Saudi Arabia to the point of America’s superiority over Saudi Arabia as India’s second-largest oil supplier.
India’s imports of oil and distillates are affected by the high number of people infected with the Coronavirus
On Monday, India announced the largest number of new daily cases infected with the Coronavirus so far and announced the closure of its largest city in Mumbai, these events may threaten demand for fuel and crude oil imports in the third-largest importer of oil in the world.
Coronavirus cases in recent weeks have been associated with higher fuel prices,
due to the high price of crude oil, and as a result, oil demand in India has decreased.
It is expected that the new strict measures in the Indian financial center and Mumbai will affect the consumption and imports of oil,
as refiners are not satisfied with the high oil prices due to OPEC production cuts.
The figures approved by the Indian government in mid-March showed that record-breaking gasoline and diesel prices disrupted the return of fuel demand in India in February, as oil consumption decreased by 5%,
and reached its lowest level since September of last year.
The Diesel consumption
Diesel consumption has also decreased by 8.5%, which is the most used fuel in India,
while demand for gasoline has decreased by 6.5%.
Gasoline and diesel prices in India have risen to record levels in February,
but state-controlled refineries have halted the rise in prices at the pump.
Ministry of Petroleum
According to data from the Ministry of Petroleum, PTI,
India’s largest news agency was quoted as saying.
During the past two weeks, fuel prices have decreased due to lower crude oil prices,
but the escalating numbers of people infected with the Coronavirus pose a threat to demand in April.
India’s oil imports are also very sensitive to international crude oil prices,
and the government has openly expressed its dissatisfaction with OPEC’s policies since the beginning of 2021,
which, as India says, are “Artificial cuts to keep the price going up” This prompted the third-largest importer of oil in the world to search aggressively to diversify sources of crude oil away from the largest regional supplier to the Middle East.
About 3.6 million barrels of crude oil and petroleum products per day pass through the choke point.
It is estimated that this chock point cost global trade between $ 6 billion and $ 10 billion.
Therefore, to avoid a recurrence of that crisis,
some oil and LNG tankers have been diverted to other routes.