The following are futures positions of non-commercials as of May 24, 2016. Change is week-over-week.
Crude oil: OPEC meets on June 2nd (Thursday). Crude oil has rallied strongly into the meeting. The likes of Angola, Nigeria, and Venezuela have suffered a lot from the drop in oil. But they don’t carry much weight within the cartel.
It is probably unrealistic to expect Saudi Arabia to deviate from its market-share goals. As is to expect Iran to agree to a production cutback. In fact, the latter on Sunday did say it had no plan to halt a rise in production and exports. Its crude exports, excluding gas condensates, are two million barrels per day currently and would reach 2.2 mb/d by the end of summer.
Markets currently are focused on the positives.
For the week ended May 20th, U.S. crude stockpile dropped by 4.2 million barrels to 537.1 million barrels. Inventory is now down 6.3 million barrels from the April 29th high of 543.4 million barrels, which was the highest since the all-time high 545.2 million barrels in October 1929.
Crude imports fell, too, down 362,000 barrels per day to 7.3 million b/d.
Crude production fell by another 24,000 b/d, to 8.77 mb/d. This was the 11th straight weekly drop and seventh sub-nine mb/d. Production peaked at 9.61 mb/d in the June 5th week last year.
Also declining was distillate inventory, down 1.3 million barrels to 150.9 million barrels. This was a sixth straight weekly drop.
Gasoline stocks, however, were up two million barrels to 240.1 million barrels. Also, refinery utilization decreased eight-tenths of a percent to 89.7 percent.
For the week, spot West Texas Intermediate crude was up another 2.2 percent – its seventh positive week in the past eight. Extended, yes, but momentum is intact, with the crude rallying along its upward-sloping 10-day moving average. It needs to drop north of five percent to go test its 20-day moving average.
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