Market Awaits Crude Oil Production Plan from OPEC+
October 5, 2022
The API reports called crude oil inventories down 1.8 million barrels, it called gasoline inventories down 3.5 million and distillates down 4 million barrels.
The average estimates for the government’s DOE report from the Bloomberg survey is calling crude up 1.577 million barrels, gasoline down 1.232 million and distillates down 1.476 million barrels.
Today is the OPEC+ meeting and that will be the big news of the day.
Even if OPEC plus cuts more than 1 million barrel per day it will largely be a symbolic move as they have been producing well below their quotas for some time now. The OPEC+ group produced 3.58 million bpd collectively below their targets in August being a record low. Some see this as a push back against the US that has been asking the group to not cut production and produce more. This is evidence that the relations between Saudi Arabia and US have not been progressing in a positive direction.
Shale oil producers are telling investors limited workers and equipment will keep drilling activity near current levels into next year.
The average estimate for today propane inventory update is to see a build to stocks at 2.1 million barrels. The five year average for this reporting week is a build of 1.814 million barrels. If the market does see a 2.1 build it will be another above average build and keep prices near current levels.
The energy market will be in a pretty tight range until OPEC releases its statement about their plans moving forward.