Corona Virus
Stay Safe, FollowGuidance
Fetching Location Data…
Vladimir Zernov
Crude Oil

Oil Video 12.08.20.


Crude Inventories Decline by 4.5 Million Barrels

EIA has just published its Weekly Petroleum Status Report which showed that crude oil inventories declined by 4.5 million barrels.

This data was in line with yesterday’s API Crude Oil Stock Change report which indicated that crude inventories fell by 4.4 million barrels.

Crude oil imports declined by about 0.4 million barrels per day (bpd) and played a material role in the crude inventory draw.

Meanwhile, gasoline inventories decreased by 0.7 million barrels while distillate fuel inventories decreased by 2.3 million barrels.

Importantly, the U.S. domestic oil production remained in a downside trend and declined from 11 million bpd to 10.7 million bpd.

Previously, U.S. oil production tried to rebound after the blow dealt by the coronavirus pandemic but did not manage to get above 11.1 million bpd.

This is a very good sign for the market since many traders were worried that WTI oil prices above $40 would lead to a material rebound in U.S. oil production. This is not happening. On the contrary, the U.S. oil production is once again under pressure which is bullish for oil.

OPEC Revises Its Oil Demand Outlook

Today, OPEC released its Monthly Oil Market Report which indicated that OPEC decided to revise its estimate of global oil demand growth from -8.9 million bpd to -9.1 million bpd.

OPEC stated that lower economic activity levels in certain non-OECD countries were the main reason for the revision. Brazil and India have so far failed to contain the pandemic so it looks like OPEC expects that problems with coronavirus in these countries will hurt demand for oil.

For this year, OPEC expects oil demand of 90.6 million bpd. In the next year, oil demand is set to increase to 97.6 million bpd.

Interestingly, OPEC expects that non-OPEC supply may grow in the third quarter. Specifically, OPEC noted that U.S. shale oil producers showed signs of restarting output.

The above-mentioned EIA Weekly Petroleum Status Report painted a completely different picture as it highlighted a material decline in U.S. oil production.

For now, oil traders will likely focus on the continued decline in inventory levels. Oil remains in an upside trend, but more positive news about COVID-19 vaccine may be required to push oil to new highs.

For a look at all of today’s economic events, check out our economic calendar.

Don't miss a thing!
Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Trade With A Regulated Broker

  • Your capital is at risk
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.