The following are futures positions of non-commercials as of April 12, 2016. Change is week-over-week.
Crude oil: Will Sunday’s Doha talks live up to expectations? Likely not. An agreement that solidifies on earlier output-cut proposals probably ends up raising risks that a lot of shale oil that was at risk of being cut – a Saudi goal all along – would be profitable again. The glut remains in this scenario.
In the meantime, the International Energy Agency says global oil demand will grow by around 1.2 million barrels per day this year, below 2015’s 1.8 mb/d.
For the week ended last Friday, U.S. crude stocks rose by 6.6 million barrels to 536.5 million barrels – the highest since the all-time high of 545 million barrels in 1929. In the past 14 weeks, stocks have gone up by 54.2 million barrels!
Crude imports, too, rose, but by only 686,000 b/d to 7.94 mb/d – a three-week high.
Refinery utilization fell 2.2 percentage points to 89.2.
The good news came in the way of crude production and gasoline stocks. The former fell by 31,000 b/d to 8.98 mb/d. This was the first time production fell below nine mb/d since October 2014.
Gasoline stocks dropped 4.2 million barrels to 239.8 million barrels. Stocks have fallen by 18.9 million barrels in the past eight weeks. Distillate stocks, however, rose by 505,000 barrels to 163.5 million barrels.
Spot West Texas Intermediate crude rallied strongly after crucial support at $34.50-$35 held on April 5th. Subsequently, it ran past its 200-day moving average, and has retreated since Tuesday after hitting the upper Bollinger Band.
Conditions are grossly overbought. Should there be a post-Doha rally on Monday, that likely gets sold.
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