EIA short term outlook out today, OPEC meeting on 17th March, the end of cheap oil? – Part I

Crude has been steadily climbing upwards in anticipation of the OPEC meeting next week on 17th March. This momentum may also get some additional fuel by the release of the Energy Information Authority’s (EIA) short term outlook report later today. This was supported by the planned seasonal shipment reduction by OPEC members of about half a million barrels in the week ending 20th March. Then there is anticipated spring rally in prices on account of the driving season and the article in Barron on Monday projecting 100 dollar oil based on technical indicators by early spring. And on a completely different note the 4% price cut on shipments to Asia by both ADNOC and ARAMCO and a rise in prices on shipments to the US by ARAMCO.

Where ever you look there is news indicating, predicting, projecting, promising the end of cheap oil.

Oil Volume on NYMEX

Oil volume on the NYMEX was 484,318 contracts as of Friday evening in New York. Volume totaled 553,811 contracts on Thursday, 6 percent less than the average of the past three months. Open interest was 1.32 million contracts, the most since Feb. 12

US Crude Oil inventories

U.S. crude inventories climbed 4.03 million barrels to 341.6 million in the week ended Feb. 26, the highest since August and 5.7 percent above the five-year average for the period, according to the EIA release on 3 March. Part of this is because of the seasonal build up going into spring but what about the other part. More on this later today.