EIA Reports Massive Oil Supply Draw Ahead of OPEC Meeting
U.S. crude oil inventories decreased by 4.4 million barrels during the week ended May 19, the Energy Information Administration reported.
EIA’s report represents the seventh consecutive weekly drop in American crude supply and beat analysts’ expectations of a 2 million barrel draw.
The news also comes one day ahead of a Vienna meeting of the Organization of the Petroleum Exporting Countries in which the so-called oil cartel will discuss extending its 1.2 million barrel per day production cut beyond the first half of 2017.
A nine-month extension looks likely, Stifel Financial analysts wrote in a research note Wednesday. Stifel’s conclusion comes after a quote surfaced from Algerian Energy Minister Noureddine Boutarfa. According to the analysts, the energy minister reportedly said OPEC at the moment has a nine-month agreement in place, “but tomorrow perhaps we’ll have another deal.
Stifel analysts suggested the minister’s tone was relatively optimistic and could signal an even better deal is on tomorrow’s agenda, perhaps even one including deeper production cuts.
Written by Tom Terrarosa