Market Report & Analysis for 6/14/2018 Afternoon Edition

The API has started the weekly inventory report cycle with across the board builds with a surprise build in crude oil and larger than expected builds in distillate fuel stocks and in gasoline stocks Total combined inventories of crude oil and products were higher on the week. Overall the market drifted lower once the report was issued. The API reported US crude oil stocks increased by 0.8 million barrels on the week.

Cushing crude oil stocks decreased by 0.7 million barrels. They also reported a 2.1 million bbl build in distillate fuel inventories and a 2.3 million bbl build in gasoline stocks. Total combined inventories of crude oil and refined products were higher for the week and outside the range of market expectations. The EIA released their monthly oil projections for June.

• EIA estimates that U.S. crude oil production averaged 10.7 million barrels per day (b/d) in May, up 80,000 b/d from the April level. EIA projects that U.S. crude oil production will average 10.8 million b/d in 2018, up from 9.4 million b/d in 2017, and will average 11.8 million b/d in 2019.

• EIA estimates that U.S. crude oil production averaged 10.7 million barrels per day (b/d) in May, up 80,000 b/d from the April level. EIA projects that U.S. crude oil production will average 10.8 million b/d in 2018, up from 9.4 million b/d in 2017, and will average 11.8 million b/d in 2019.

• EIA estimates that U.S. crude oil production averaged 10.7 million barrels per day (b/d) in May, up 80,000 b/d from the April level. EIA projects that U.S. crude oil production will average 10.8 million b/d in 2018, up from 9.4 million b/d in 2017, and will average 11.8 million b/d in 2019.

• OPEC, Russia, and other non-OPEC countries meet on June 22, 2018, to assess current oil market conditions as they relate to their existing crude oil production reductions, which are scheduled to continue through the end of 2018. Oil ministers from Saudi Arabia and Russia have announced they will re- evaluate the production reduction agreement given the accelerated output declines from Venezuela and the uncertainty surrounding Iran’s production levels. In this forecast, EIA assumes some supply increases from major oil producers in 2019.

However, depending on the outcome of the June 22 meeting, the magnitude of any supply response is uncertain. Currently, EIA forecasts global oil inventories will increase by 210,000 barrels per day (b/d) in 2019, which EIA expects will put modest downward pressure on crude oil prices in the second half of 2018 and in 2019.