Today, crude oil prices have declined after the Energy Information Administration reported that crude oil inventories added 3.6 million barrels a week before November 23. That's up from the 4.9 million barrels build a week earlier.
According to the EIA, after yesterday, the American Petroleum Institute reported an increase in reserves of 3.453 million barrels, which had no effect on prices.
EIA also reported that gasoline stocks declined by 800,000 barrels last week, while distillate stocks added 2.6 million barrels. A week earlier, authorities estimated a decline of 1.3 million barrels in gasoline and a decrease in distillate fuel reserves of 100,000 barrels.
Meanwhile, production will go to new highs, and this will continue, according to most estimates, if oil prices do not decline at a rapid pace. The probability of this incident is relatively small. OPEC is meeting next week in Vienna to discuss a new round of production cuts, and most analysts expect cuts to be agreed with Russia, which will rejoin it.
However, Morgan Stanley, first, sees a 33 percent chance of a cartel refusing or refusing to accept production cuts, and in this case prices will certainly fall more, putting pressure on dismal economic prospects and fears of oversupply of crude of oil. The argument against production cuts is quite simple: market share. It is not surprising that some members of OPEC have already opposed reductions, in particular Libya, which states that it is expected that he will be granted an exemption from any reductions.
In addition to the OPEC meeting, observers in the oil market will monitor the G-20 meeting, where Russia may or may not clearly indicate whether it will join any reduction agreements. Like last time, Moscow would be a decisive ally of the cartel if it decides to join in the reduction or rupture of the deal if it decides to sit down.
Irina Slavyanaya for Oilprice.com
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