Crude oil weakens
After briefly recovering on Thursday, July 14, 2016, crude oil trading was weak in the early morning hours of July 15. At 6:30 AM EST, WTI crude oil futures contracts for August delivery were trading at $45.39 per barrel, a decline of ~0.63%. Brent crude oil was trading at $47.08 per barrel, a decline of ~0.57%.
Fears of a global crude oil glut weigh on prices
Fears of a global crude oil glut are still weighing on crude oil prices, despite a slowdown in production and an increase in demand. Prices recovered on Thursday, July 14, but sentiment around the crude oil market still isn’t strong.
It was a bearish crude oil market outlook report that the IEA (International Energy Administration) released on July 13. According to the report, the supply glut in the crude oil market could persist much longer than expected. This is in spite of a healthy demand and a decline in production due to the increase in stored crude oil inventories.
According to the EIA, crude oil inventories declined by 2.6 million barrels in the week ended July 8, 2016. That’s less than the Market expectation of a drawdown of 3.0 million barrels. It weighed on crude oil prices.
On the other hand, the recently released better-than-expected Chinese economic data are supporting crude oil prices today. According to data released by the National Bureau of Statistics of China, China recorded a YoY growth of 6.7% in the second quarter of 2016.
The Market is looking forward to the Baker Hughes oil rig count data, which reported an increase of 351 oil rigs last week. It was the fifth increase in the last six weeks.
On Thursday, July 14, major crude oil producer Carrizo Oil & Gas (CRZO) fell ~1.4%. British Petroleum (BP), Canadian Natural Resources (CNQ), and Total SA (TOT) rose ~0.01%, ~1.2%, and ~1.4%, respectively.