U.S. crude oil reserves experienced an unexpected decrease of 600,000 barrels, according to a report released last week by the Energy Information Administration.

This development contradicts the projections of experts in the field, who expected an increase of 500,000 barrels during the period from September 13 to 19.

According to information provided to Bloomberg, “reserves fell to 414.8 million barrels, despite the fact that during that period crude oil production increased to 13.5 million barrels per day, near its record level, and that the United States increased imports by 14% and reduced exports by 15%.”

At the same time, the country’s refineries reduced their capacity from 93.3 % to 93 %. As is known, lower refinery activity tends to increase crude oil reserves, since less oil is being refined.

On the other hand, there was a slight increase in refined products on the market (+0.76 %), as a result of the growth in gasoline deliveries (+1.70 %).

M. Pino

Source: bancaynegocios

(Reference image source: Zbynek Burival on Unsplash)

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U.S. oil stockpiles experienced a fifth consecutive contraction during the week ending July 26. A drop of 3.4 million barrels was confirmed.

According to analysts, and according to a consensus collected by the Bloomberg agency, the figure is well above the 1.10 million expected.

The country is going through a drop in oil reserves that is not in line with “the slowdown in activity recorded in US refineries, which last week only operated at 90.1 % of their capacities compared to 91.6% the previous week.

For their part, gasoline reserves also fell, by 3.7 million barrels, exceeding the decrease of 1.29 million expected by analysts.”

However, oil production remained at 13.3 mbd. Regarding demand, the volume of refined products fell to 20.7 mbd compared to 21 million the previous week.

For its part, “demand rose a little in year-on-year measurement to 20.48 mbd compared to the 20.19 mbd registered a year ago (+1.4 %).”

M.Pino

Source: bancaynegocios

(Reference image source: Maria Lupan in Unsplash)

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The world economy depends largely on oil as a strategic energy and economic resource. According to the top ten countries with the largest reserves from the United States Central Intelligence Agency (CIA), Venezuela leads the list, with 303.8 billion barrels.

This places the South American nation in a privileged place thanks to its energy potential. The positions on the Agency’s list are distributed as follows:

1. Venezuela: 303.8 billion barrels.
2. Saudi Arabia: 258.6 billion barrels.
3. Iran: 208.6 billion barrels.
4. Canada: 170.3 billion barrels.
5. Iraq: 145.5 billion barrels.
6. Kuwait: 101.5 billion barrels.
7. United Arab Emirates: 97.8 billion barrels.
8. Russia: 80 billion barrels.
9. Libya: 48.3 billion barrels.
10. United States: 47.1 billion barrels.

Reasons that make oil a valuable resource

For most countries, crude oil is a determining economic resource because it generates high income through the export of not only oil itself but also derivatives for various sectors of the global industry.

On the other hand, and connected to the above, “oil is the main source of energy in many parts of the world.” It is used in processes to “generate electricity, power transportation vehicles, heat homes and as a raw material in the manufacture of petroleum products, such as gasoline, diesel and kerosene.”

Industrial development is another of the strategic points that oil involves, since it is used in the manufacturing of chemical and plastic products.

It is also worth mentioning the geopolitical influence that countries with the largest oil reserves can have in the international context, favoring the signing of trade agreements and alliances or political negotiations, as well as investment in “social programs, infrastructure and public services.”

M.Pino

Source: Portafolio.co

(Reference image source: Unsplash+, in collaboration with Getty Images)

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The US Energy Information Agency (EIA) revealed that commercial oil reserves in the United States suffered a spectacular drop of 17 million barrels during the week ending July 28. This reduction is much greater than what the market expected and represents a record in the reduction of inventories.

The volume of crude oil in storage stood at 439.8 million barrels, 17 million barrels less than the previous week, which surprised analysts who projected a reduction of only 1.05 million barrels, according to the consensus of Bloomberg Agency.

Already previously, brokers had anticipated a strong reduction in US crude inventories after data published by the American Petroleum Institute (API) the day before, which estimated a drop of 15.4 million barrels.

The market reaction was not as expected, as oil prices did not rise as might have been expected with bullish news. On the contrary, when the EIA report was published, crude oil prices fell.

North Sea Brent barrels for October delivery shed 2.01 % to $83.20 in London, while West Texas Intermediate (WTI) for September lost 2.31 % to $79.49 in New York.

Although the two world crude oil benchmarks had reached their highest level in more than three months on Wednesday morning, prices quickly found resistance and fell.

Bart Melek, an analyst at TD Securities, noted that despite the historic drawdown in commercial crude oil reserves, market concerns about an interest rate hike raised fears about the economic outlook.

On the other hand, Matt Smith of Kpler, indicated that the price of a barrel had experienced a strong increase in the last month and is now facing a resistance level.

In summary, the unexpected and significant decline in oil reserves in the United States surprised the market, but fear of interest rate movements and price resistance contributed to a drop in prices, despite the news. positive on crude oil inventories.

K. Tovar

Source: Bancaynegocios

(Reference image source: Grant Durr, Unsplash)

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