The oil market is slightly up this morning ahead of the Baker Hughes rig count due later this morning. U.S. crude finished Thursday’s session at $46.38, the lowest since October 5th. With the EIA reporting an increase of 7.6 million barrels in crude supplies yesterday, one analyst stated “while builds are typical this time of the year, this is a rather large build.” The EIA also predicted the market would remain oversupplied through 2016 with another analyst stating that “even if crude prices go up now, we could be seeing Iranian crude coming back to the market, pushing it down again. I think downward movement is more likely for the rest of the year.” The spike in stockpiles came as refinery utilization fell 1.5% from the previous week. Additional EIA data showed that gasoline stocks fell by 2.6 million barrels last week with distillates down by 1.5 million barrels.
In other market news, a meeting being held next week in Vienna with OPEC techies may shed some light on their plans with regards to future production levels.
The 2015 U.S. Winter Outlook (December through February):
· Wetter-than-average conditions most likely in the Southern Tier of the United States, from central and southern California, across Texas, to Florida, and up the East Coast to southern New England. Above-average precipitation is also favored in southeastern Alaska.
· Drier-than-average conditions most likely for Hawaii, central and western Alaska, parts of the Pacific Northwest and northern Rockies, and for areas near the Great Lakes and Ohio Valley.
· Above-average temperatures are favored across much of the West and the northern half of the contiguous United States. Temperatures are also favored to be above-average in Alaska and much of Hawaii. Below-average temperatures are most likely in the southern Plains and Southeast.