The following is an excerpt from Amey Stone | March 20, 2017 | Barrons.com |
The price of crude was lower on Monday as investors feared increasing U.S. production would offset OPEC cuts. But Rob Thummel, a portfolio manager at Tortoise Asset Management, still said in a podcast Monday that he thinks oil prices may be at a turning point.
The key event is that last week, the Energy Information Administration (EIA) reported a decline in U.S inventories. Thummel comments:
The decline was unexpected and may represent a turning point that leads to higher oil prices. Traders bearish on oil were questioning whether the OPEC cuts were really happening as weekly U.S. oil inventories had increased for nine consecutive weeks, mainly due to higher U.S. oil imports.
It also looks like OPEC production cuts are happening, the EIA report shows. He notes:
First, oil imports fell. Recall that oil transported from OPEC countries is generally imported via the U.S. Gulf Coast. Last week, crude oil imports along the Gulf Coast were over 400,000 barrels per day lower than the previous week. Second, crude oil imports from OPEC countries like Saudi Arabia and Kuwait declined as well, according to the EIA report. For example, oil imported from Saudi Arabia declined by approximately 400,000 barrels per day last week.
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