US oil inventories suddenly increase for the second week in a row 2021-10-06T17:22:14 US oil inventories suddenly increase for the second week in a row US oil inventories suddenly increase for the second week in a row :On Tuesday 5th October the American Petroleum Institute (API) declared a sudden rise in crude oil stockpiles reaching 951.000 barrels for the week ended on Friday 1st October. Analysts expected US stockpiles to decline by 300.000 barrels for the week, yet this is the second week in a row analysts’ expectations failed. In the last week the API declared a sudden rise in oil stockpiles by 4.127 million barrels, yet it was a surprise for the oil market especially after analysts expectations failure as they expected a decline of 2.333 million barrels for the week. The API declared another rise in gasoline stockpiles for the second week in a row by 3.682 million barrels for the week ending October 1st, besides last week’s rise by 3.555 million barrels Distillate stockpiles rose by 345.000 barrels throughout the week, compared with last week’s rise by 2.483 million barrels. Cushing stockpiles rose another time this week, to add 1.999 million barrels to reserves; while it rose by 0.359 million barrels in the last week. Topics Oil prices for the week Oil production rates for the week OPEC Decides Oil prices Aramco enhances Saudi’s foreign investment Oil-prices-for-the-week On Tuesday oil prices rose before data publishing in accordance with the gas crisis and OPEC’s decision to keep production plans, and suspend increasing production by more than 400.000 barrels per day, which was supposed to be applied from November. Before midday West Texas Intermediate crude rose 2% till data was published. After data publishing West Texas Intermediate was for 79.17$ (it rose more than 4$ throughout the week, and 1.55$ on the day), Brent crude rose 1.87% to 82.78$ a barrel on the day. In the USA oil stockpiles sold out 72 million barrels this year, according to the API data (less than pre-pandemic levels). The latest data by the Energy information administration EIA showed that US crude oil reserves are declining 7% below the average of the five years for the same time of the year at 418.5 million barrels. Oil production rates for the week US oil production recovered slowly after Ida’s hurricane suspensions showing a rise unlike the last three weeks. For the week ended September 24th US oil production rose by 500.000 barrels per day at 11.1 million barrels per day, to offset its losses due to the Ida hurricane by 400.000 barrels. OPEC Decides Oil prices OPEC will remain the main controller in moving oil prices in the next few months, according to Mike Muller’s statement (Asian Vitol’s operations chief), reported by Bloomberg “To a high extent oil prices are controlled by OPEC.” The situation changed rather than three years before when the USA was the main factor in oil prices due to the second leap of oil shale, as the flourishment made the USA the world’s biggest oil producer. As mentioned before, crude oil exceeded 80$ at the end of last week, before OPEC’s meeting on Monday to discuss production control steps. Some analysts didn’t agree that OPEC will respond to demands to increase oil production and reduce prices, not only because OPEC will benefit from rising prices but simply because some members can’t increase their production capacity as fast as that. They also don’t have reserves to maintain supplies high to such levels. Steven Breenock from PVM for oil intercession mentioned to Reuters that “Oil prices expectations on the short term are still supportive.” “The current price is going to recover.” Geffery Halley from OANDA sees that oil stocks deals are only for rich adventurers. Oil market movement will stay the same for a long time if the winter in the northern countries was cold as expected. As gas reserves are falling below the average of the five years in Europe, and power declining in China which led to closing factories and raising fears of electricity power cuts. Demand on oil is expected to stay strong for some time despite the negative expectations in the long term. This means that OPEC will continue making decisions with leadership of the most overabundant countries. Aramco enhances Saudi’s foreign investment Saudi Arabia recorded the highest quarterly direct foreign investment in the second quarter due to infrastructural deals for pipelines that were closed by the giant Aramco at that time. As said Saudi Arabia is getting ready to open big assets for the foreign investment too. The direct foreign investment numbers in Saudi Arabia were at one billion dollars for each quarter in the last three years, in the second quarter of 2021 the direct foreign investment number was at 13.8 billion dollars, according to Saudi’s central bank data, reported by Forbes magazine. The master drive for the standard foreign investment was a deal of 12.4 billion dollars with participation of Saudi’s Aramco. In April Aramco struck a deal with a consortium under leadership of the American Energy Partners Global EIG to sell 49% share of Aramco oil pipelines for 12.4 billion dollars. Aramco oil pipelines is a new commercial entity that was formed to keep or trade rights of 25 years of shifting crude pays through Aramco’s pipelines network. In June the Saudi giant company finished the deal of selling 49% share to consortium, which is dominated by many investors from North America, Asia, and the middle east. After closure Aramco maintained its share of 51% of Aramco oil pipelines and kept complete property and operational control of stabilized crude oil pipelines. Amin Nasser Aramco’s chief and the executive manager at the end of the deal said : “that they were planning to continue in figuring out more opportunities , to utilize their leading abilities in the industry and attract the best kind of investment to Saudi Arabia”. James Swanston, middle east and west Africa economist of capital economics, headquartered in London when commented on the direct foreign investment in Saudi Arabia said:” that I think that this deal is the master drive of the direct foreign investment recovery in the second quarter, as this deal included the sale of more than 10% of voting share to be classified as FDI incoming.