Crude oil eased in the early hours
After falling for two consecutive trading days, crude oil eased and recovered moderately in the early hours on September 15. At 7:00 AM EST on September 15, the West Texas Intermediate crude oil futures contract for October delivery was trading at $44.02 per barrel—a gain of ~1.0%. The Brent crude futures contract for November delivery was trading at $46.43 per barrel—a gain of ~1.3%.
Market sentiment weakened this week
This week, the sentiment in the crude oil market is weaker due to multiple factors. The bearish crude oil market report released by the IEA (International Energy Agency) dented the sentiment on September 13. In this report, the IEA revised the demand forecast downward for crude oil in 2016 and 2017 by 100,000 bpd (barrels per day) and 200,000 bpd, respectively. Following this report, the American Petroleum Institute and the EIA (U.S. Energy Information Administration) reported a build in inventories by 1.4 MMbbls (million barrels) and a decline by 0.56 MMbbls, respectively.
These reports are better than the market’s expectation of a build of 3.8 MMbbls. However, the surprise build in the stockpiles of petroleum products weighed on the market. According to the EIA, distillates inventories—including heating oil and diesel—rose by 4.6 MMbbls, while the market was expecting 1.5 MMbbls. Similarly, the gasoline inventory levels rose to 567,000 barrels, while the market was expecting 343,000 barrels. Read Why Did Crude Oil Fall on Wednesday, September 14? to learn more.
In the early hours, crude oil fell to a fresh two-week low due to news of a restart of exports by Nigeria and Libya amid the supply glut situation. On September 14, major crude oil producers Carrizo Oil & Gas (CRZO), Canadian Natural Resources (CNQ), Total SA (TOT), and British Petroleum (BP) fell 3.3%, 0.72%, 1.7%, and 0.6%, respectively. The SPDR S&P Oil & Gas Exploration and Production ETF (XOP) fell 2.4% and the PowerShares DB Oil ETF (DBO) gained 1.3%.
In the next part, we’ll discuss how metals performed in the early hours on September 15.