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Global liquid fuels inventories see first quarterly draw since 4Q2017

Oil&Gas Materials 10 April 2019 10:51 (UTC +04:00)

Baku, Azerbaijan, April 10

By Leman Zeynalova – Trend:

Global liquid fuels inventories have seen the first quarterly draw since the fourth quarter of 2017, the US Energy Information Administration (EIA) said in its April Short-term Energy Outlook (STEO), Trend reports.

“EIA estimates that global liquid fuels inventories declined by 0.7 million barrels per day (b/d) in March 2019 and by 0.5 million b/d for the first quarter of 2019, which would be the first quarterly stock draw since fourth-quarter 2017. High compliance among a number of OPEC and non-OPEC countries subject to voluntary oil production reductions has contributed to falling petroleum inventories in the Organization for Economic Cooperation and Development (OECD),” said EIA.

The report shows that Saudi Arabia, the largest oil producer in OPEC, produced 9.85 million b/d in March, down by almost 0.9 million b/d from October.

OECD petroleum inventories are now lower than the five-year (2014–18) average, which is considered a key metric among market participants for assessing global oil balances, according to EIA.

EIA estimates that some of the largest global inventory withdrawals occurred in the United States and are likely contributing to the steepening of the WTI futures curve in particular.

U.S. petroleum inventories declined by more than 10 million barrels per week three times in the first quarter of 2019—including two consecutive weeks in March—the most weekly declines of more than 10 million barrels for the first quarter of any year since 2007, reads the report.

“A spill in the Houston Ship Channel at the end of March disrupted movement in the region and may have affected petroleum imports, exports, and inventory management in the final week of the month, but the large stock draws throughout the quarter largely reflect the fundamentals of an increasingly tight petroleum market.”

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