The EIA revealed crude exports jumped to a second consecutive week last week to 2.4 million barrels per day.
“We see another counter-seasonal draw to crude inventories as rising exports have countered a rebound in imports,” Matt Smith, director of commodity research at ClipperData, told the WSJ. “The gasoline draw is also supportive amid elevated refinery runs.”
Energy Market Maintains Rally
The energy market also maintained its rally Wednesday after a surge in prices Tuesday on reports “suggesting Saudi Arabia may have moved towards at least temporarily accepting $80+ crude,” according to analysts at consultancy JBC Energy. “The market may have taken this a sign that supplies may not go up much in response to further declines in Iranian crude exports.”
The Organization of the Petroleum Exporting Countries and its allies, including Russia, will meet this weekend in Algiers to discuss further production increases in light of the higher prices. The cartel and its allies have begun boosting output by up to one million barrels a day from June after more than a year of capping output.
“U.S. sanctions on Iran’s oil exports are just six weeks away and logic suggests the OPEC+ alliance will ramp up output to alleviate the shortfall,” Stephen Brennock, an analyst at brokerage PVM Oil Associates Ltd, told the WSJ. “Yet with the Saudis at ease with higher oil prices and wary of riling the Iranians, the OPEC kingpin might favor maintaining the status quo.”
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