for Crude inventories
OPEC’s strategy centers around restricting supply to the Atlantic basin since inventory data in the U.S. is the most timely and visible in the world. From February to early April, U.S. imports from Saudi Arabia have plummeted by about 462,000 b/d.
A large stock build in the first quarter, rampant producer hedging, and large amount of investor inflows in the futures market created an “unbalancing of the market,” the opposite of OPEC’s stated goal, according to one prominent oil market analyst.
Brynne Kelly, an independent portfolio manager, speaks to The Fuse about Twitter, oil and gas prices, and the evolving nature of oil markets.
Although OPEC is not taking action to shore up prices in the current environment, the situation is likely to be more in OPEC’s favor in the medium to long term. Conditions will change to give it more market share and influence over prices in the coming decades.
The first crude stock declines will have a significant psychological impact on the market, but it will be tricky to determine if the draw is a standard seasonal pull, or if the market is beginning to finally rebalance.