24 February 2016

Crude Oil Inventory analysis for today

“SELL CRUDEOIL BELOW 2150 TGT 2110/2050 SL 2180”

Crude Oil : Oil prices tumbled 4 percent on Tuesday after Saudi Oil Minister Ali AlNaimi ruled out production cuts, and extended losses after settlement when a U.S. industry trade group API said domestic crude stockpiles swelled by more than twice what analysts had expected. Crude slid as Al-Naimi, at a conference in Houston, restated the kingdom's rationale for maintaining output was that demand would absorb excess crude that has crushed prices over the past 20 months. Big oil exporters Saudi Arabia and Russia have proposed to freeze output at January levels, which were near record highs, but only if other producers also do the same. More meetings on the potential freezes will be held in March, al-Naimi told the IHS CERA week conference in Houston. An estimated 1 million to 2 million barrels of oil are being produced daily in excess of demand, and analysts and traders remained skeptical that the freeze will erase the big global supply glut.
Also, Iran, now free of Western sanctions that hurt its crude trade, is seen as unlikely to agree to an output cap. According to a report from Iran's student news agency ISNA, the country's oil minister said the production freeze is "laughable," because it does not allow Iran to regain its production share. The oil market remained bearish on the first day of trading for the April U.S. crude futures contract.

Outlook: We expect crude oil prices to trade negative over uncertainty on production freeze by OPEC and Non-OPEC countries.

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