Wednesday, EIA released the inventory data. The U.S. Energy Information Administration said that crude stockpiles grew by 2.8 million barrels last week, more than double what analysts and an industry group had estimated. Gasoline stockpiles also showed an unexpected addition of 536,000 barrels. Those additions boosted total crude and product stockpiles to a new record high of 1.37 billion barrels, EIA said.
Inventory data again hit the rally of oil price. This is the third disappointed data released this week that hurts oil price. OPEC’s growing production, along with weak China economic data forced the price down before the inventory came out this morning. After this inventory data went to the market, oil lose the gain of this month. Light, sweet crude for June delivery recently traded up 50 cents, or 1.1%, to $44.15 a barrel on the New York Mercantile Exchange, down from gains that had reached nearly 3% earlier in the morning. Brent, the global benchmark, recently traded up 24 cents, or 0.5%, to $45.21 a barrel on ICE Futures Europe, down from earlier gains of about 2%.
However, the inventory data is not the one that shakes the market today. The proposal of limiting oil production on the OPEC’s meeting next month is gone. Nobody will commit to a cut of production. That’s more like the future of oil. Cartels are fighting for the market share in the ways of continuing pump oil production. IEA forecasted a shrinking oversupply early last month and now this forecast has to be revised. Oversupply is and still will be significant.
There were indications the freeze proposal could be revived at OPEC’s bi-annual meeting in June. While Venezuela -- one of the architects of the freeze plan -- requested that non-members that participated in the Doha talks should be invited to the June meeting, OPEC nations have yet to respond to the request, said two delegates.
In a sign of continuing discord within OPEC, members of the group were unable to finish their long-term strategy report at the meeting in Vienna Tuesday because of differences over the wording of the document, according to two delegates. The plan was already delayed in November because of disagreements over clauses suggested by some members about curtailing output, setting production quotas and finding ways to maximize OPEC profit.