- Bjarne Schieldrop, SEB
As data released yesterday, US crude oil stockpiles advanced more than 14 million barrels during the previous week, showing the largest weekly build since the US Energy Department started keeping records back to 1982. As data suggests, West Texas Intermediate crude prices drop 1.13% with the report's release, stabilizing at $46.33. Brent prices, in turn, went down 1.42% at $47.92. Nevertheless, oil had rallied earlier on Wednesday on a sliding dollar, and after Colonial Pipeline had to shut down its main pipeline for a second time in as many months following an explosion. Overall, oil prices tumbled around 3% yesterday after a record weekly build in US crude stocks added to worries of all-time highs in OPEC production.
In the meantime, the deal in Doha fell apart as OPEC's biggest producer Saudi Arabia would not accept Iran's position that it is their sovereign right to increase output. The general purpose of the most recent meeting was to finalize details of supply cuts and how cartel members and non-members led by the Russia will share the cuts. Although, the non-OPEC members including Azerbaijan, Brazil, Kazakhstan, Mexico, Oman and Russia together produce 21% of global supply or around 19.6 million barrels each day.
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