Kuwait and Saudi Arabia Sign Neutral Zone Deal
December 26, 2019
The inventory report from the API was released on Christmas Eve and it called crude oil stocks down 7.9 million barrels. The estimate for tomorrow’s crude oil inventories from the DOE is a draw of 1.83 million barrels. The API called gasoline stocks up 566,000 barrels and the estimate for tomorrow is a gain of 2.0 million barrels. The API called distillates stocks up 1.68 million barrels and the estimates for tomorrow is for a gain of 867,000 to stocks.
The energy market was pretty uneventful over the Holiday break as limited traders were at work. The market has been pretty limited so far in overnight and early morning trade. These energy market and the markets in general will be subdued until the New Year. There are days during this time of year when you can see some big price moves because of limited traders but so far, the market has been very tame. Trading volume in WTI crude oil was at its lowest volume on Tuesday since the Christmas break of 2016 so there has not been much trading in the markets.
China’s Finance Ministry said the country will lower imports tariffs on over 850 products from January 1st, including frozen pork and frozen avocado. It will also further lower import tariffs on some information technology products from July 1 next year.
Kuwait and Saudi Arabia signed a deal this week concerning the Neutral Zone on the border that could eventually add 500,000 bpd of crude oil to the market next year. The agreement is intended to end a 5-year dispute over 2 large oil fields that have been shut down. Chevron, who operates the oil fields said it would take up to 12 months for full oil production.
Optimism over the Phase 1 US and China trade deal and OPEC cuts continue to support the energy markets.