Crude prices jumped early this morning, recovering from the drop-off yesterday. The high so far for today was $30.61/bbl, and the low for today fell to $29.30/bbl. Are the 20s here to stay?
The International Energy Agency (IEA) released its monthly oil outlook Tuesday, and the agency dropped its 2016 oil demand growth prediction to 1.17 million b/d, after demand hit a five-year high at 1.6 million b/d in 2015. The IEA also believes that the surplus of supply over demand in the early stages of 2016 will be even greater than what was previously predicted in last month's report. The report further added that speculation about a deal between OPEC and non-OPEC countries is just speculation and nothing more. The report also said that global refinery runs fell by 1.3 million b/d in January, as seasonal maintenance in the U.S. and weakening refinery margins both curbed runs.
- IEA claims OPEC/non-OPEC output cut is unlikely; sees 2016 oil stock build of 1 mbpd
- Iran’s oil minister reveals that its domestic oil industry needs $200 billion of investment
- Iraq raises the March official selling price (OSP) of its Basra Light to Asian buyers by 20cts/bbl from February
- Gauge of small U.S. business confidence slips to two-year low in January
- German industrial output in surprise month-over-month fall of 1.2% in December
So if the IEA sees the global oil glut worsening and there are expected builds in the EIA report being released tomorrow, we should see crude/gas/diesel drop off for the rest of the week right? As we approach 1:00 p.m. ET, diesel is down $0.0450, gas is down $0.0450, and crude has fallen to $28.96. It sure seems like the bearish signals above are weighing in on the market.