OPEC Reports Oil Demand Rose in 2017

REUTERS

Yet the IEA sees inventories hardly diminishing in 2018, while OPEC believes they would be back at the five-year average by year-end, though this figure is inflated by the recent history of excess stocks.

Excluding the U.S. Strategic Petroleum Reserve, inventories are now sitting at 412.7 million barrels, the lowest level since February of 2015.

Total petroleum stocks declined by a whopping 13.8 million barrels when factoring in additional dips in supplies of propane, propylene and other oils. Analysts polled by S&P Global Platts expect a 425,000-barrel drop in oil inventories and a 2.7 million-barrel increase in gasoline stockpiles.

Distillate stockpiles, which include diesel and heating oil, fell 3.9 million barrels, versus expectations for a 86,000-barrel increase, the EIA data showed.

The West Texas Intermediate for January delivery decreased 0.02 USA dollar to settle at 63.95 dollars a barrel on the New York Mercantile Exchange, while Brent crude for March delivery lost 0.07 dollar to close at 69.31 dollars a barrel on the London ICE Futures Exchange.

USA oil prices are hovering just above $64 a barrel.

Expected growth in total USA crude supply was revised higher by 110,000 barrels a day to 820,000 a day, led by conventional production, according to the Organization of Petroleum Exporting Countries report. OPEC has never been very good at judging when to turn the taps on or off, and it does not appear that its luck will improve this time around.

The report further noted that this year also started with the OPEC vs. shale tug-of-war, although in the first two weeks of 2018, geopolitical risks and declining inventories overshadowed concerns over the rise in U.S. shale, and supported oil prices and sent Brent briefly breaking above $70 a barrel. EIA's latest Short-Term Energy Outlook from earlier this week estimated that USA crude oil production averaged 9.3 million bpd in the whole of 2017, and 9.9 million barrels per day (bpd) in December alone. But the strategy gained traction in the second half of the year as stronger demand and supply threats from the Persian Gulf to the North Sea helped deplete brimming storage tanks.

Bloomberg said Riyadh plans to reach 11 million barrels per day by 2023, up from less than 10 million now while Iraq and the UAE are working on expansions, and so will Iran. Production of the fuel averaged 9.7 million bpd last week, up from 9.5 million bpd in the week to January 5.

Nigerian crude production increased by 75,700 barrels per day in December.

Non-OPEC less Russian Federation and the United States of America, yearly average, is down 1,142,000 barrels per day or.35% per year since 2005.

Global headlines began screaming nearly immediately: The United States will overtake Saudi Arabia as the world's leading oil producer around 2017 and will become a net oil exporter by 2030.

According to AAA, the current national average pump price per gallon of regular gasoline is $2.536, up almost four cents from $2.508 a week ago and almost 11 cents per gallon higher compared with the month-ago price. That is just under 4% or, on a yearly average, that is one-third of one percent per year. The roll yield is the profit traders can earn when they roll their investment in crude oil futures, which expire every month, into contracts that expire at a later date.

Chevron Corp. (NYSE: CVX) traded down about 0.7%, at $131.49 in a 52-week range of $102.55 to $133.88.

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