Oil Price Fundamental Daily Forecast – Bearish API Data Sinks Prices Ahead of EIA Inventories Report

U.S. West Texas Intermediate and international-benchmark Brent crude oil futures are down sharply on Wednesday following another disappointing industry report that showed a big build in crude oil and distillate stocks. The pressure could increase later today when the government releases its official inventories data at 14:30 GMT.

At 12:09 GMT, December WTI crude oil is trading $81.99, down $1.92 or -2.29% and December Brent crude oil is at $83.07, down $1.65 or -1.95%.

Meanwhile, OPEC and its allies are taking more heat from the United States to raise production after President Joe Biden, speaking at a climate summit in Glasgow, blamed a surge in oil and gas prices on a refusal by OPEC nations to pump more crude. But OPEC+ is not expected to make any changes to its agreement to maintain its 400,000 barrel per day monthly supply increases.

American Petroleum Institute Weekly Inventories Report

The API late Tuesday reported its sixth straight week of crude oil inventory builds. This week, the API estimated the inventory build for crude oil to be 3.594 million barrels. But it’s the Cushing inventory yet again that is stealing the show this week, oilprice.com reported. Analysts were looking for a build of 1.567-million barrels for the week-ending October 29.

The API also reported a draw in gasoline inventories of 552,000 barrels for the week-ending October 29 – compared to the previous week’s 530,000-barrel build.

Distillate stocks saw an increase in inventories of 573,000 barrels for the week, on top of last week’s 986,000-barrel increase.

The API also reported yet another draw in Cushing inventories. This week’s draw was 882,000 barrels. Last week, traders were shocked by a 3.734-million barrel decrease.

OPEC+ Plans Output Increase of 400,000 Barrels per Day in December

Last week, an OPEC+ committee largely stuck to forecasts of a strong demand rebound this year and next ahead of a meeting next week, at which the group is expected to rubber stamp a planned output increase of 400,000 barrels per day (bpd) in December.

The Joint Technical Committee (JTC), which met on Thursday, now expects oil demand to grow by 5.7 million bpd in 2021, 120,000 bpd below OPEC’s forecast in its latest monthly report, two OPEC+ sources said.

Daily Forecast

After the API’s bearish report, traders are now bracing for the U.S. Energy Information Administration’s (EIA) weekly inventories data that is forecast to show at 1.9 million barrel increase. A bigger than expected build could take prices back to last week’s low levels.

President Biden’s statement is part of a broad effort by the White House to pressure OPEC and its allies to increase supply, but Saudi Araba already dismissed his request a week ago.

Saudi energy minister Prince Abdulaziz bin Salman twice dismissed calls by major consumer nations to speed the rate of OPEC+ production increases, saying the group does not expect crude oil shortages in the market.