Confusion reigns in crude oil ahead of weekly EIA report
Head of Commodity Strategy
Summary: Current very tight market conditions are keeping the risk to oil prices skewed to the upside, but this is a market with many moving and opposing parts and the picture could change very quickly. The next impulse could come from the EIA petroleum status report at 14:30 GMT.
Given the very tight market conditions currently being signalled through the steepening backwardation in Brent we maintain the view that the risk remains skewed towards higher prices. This may change if Saudi Arabia and its partners in the Opec+ JMMC group signal a willingness to increase production when they meet in Jeddah on May 19.
Struggling to gauge the eventual outcome of so many moving and opposing parts, the market has instead been trading from one headline to another. The next being the Weekly Petroleum Status Report from the EIA at 14:30 GMT (16:30 CET). The market is trading lower today following yesterday’s update from the American Petroleum Institute which showed a build in both crude oil and products.