Recap:The oil market posted an inside trading day on Thursday as traders remained cautious about record high US crude inventories. The market posted a low of $50.77 on the opening and traded in a 20 cent trading range before the market began its move higher. The market gradually traded higher throughout the session and posted a high of $51.82 ahead of the close. May WTI, which failed to test its resistance at its previous high, settled higher for the third consecutive session. It ended the day up 55 cents at $51.70, the highest settlement since March 7th. The June Brent contract settled up 53 cents at $54.89. Meanwhile, the product markets also settled in positive territory. The May RBOB contract settled up 1.43 cents at $1.7296 and the May heating oil contract settled up 94 points at $1.6129.
Fundamental News: Genscape reported that crude oil stocks held in Cushing, Oklahoma in the week ending April 4th increased by 312,745 barrels on the week but fell by 117,980 barrels from Friday, March 31st to 71,213,050 barrels.
Shipping and oil sources said Iran has sold all the oil it had stored for years at sea and the country is now struggling to keep increasing exports as it deals with production constraints. They said Iran had sold its stocks from floating storage in the past two weeks. Much of the oil stored was condensate. Prior to the lifting of sanctions, Iran stored unsold oil on ships, which peaked in 2015 at 40 million barrels on around 25 tankers. The country has up to 60 oil tankers in its fleet. Iran's drawdown of floating storage gathered pace in September. By the start of 2017, Iran still held an estimated 16 million barrels of oil on ships.
The head of Libya's National Oil Corp, Mustafa Sanalla, defended the organization on Thursday against repeated challenges to its legitimacy, saying it was working for all Libyans rather than any particular faction. On Thursday, a spokesman for the breakaway NOC in Benghazi said it held an emergency meeting a day earlier to discuss the Tripoli NOC and the transgression it carries out in monopolizing the sale of oil. He said contracts with international oil companies were protected by the UN. He said Libya's national output stands at 693,000 bpd and further increases at Sharara could help it increase it to 800,000 bpd by the end of April and to 1.1 million bpd by August.
The EIA reported that US weekly imports of crude from Saudi Arabia, Iraq and Venezuela each fell by more than 20% in the week ending March 31st. Imports of Saudi crude fell to 888,000 bpd, the first time this year that imports from Saudi Arabia fell below 1 million bpd.
China will import record amounts of oil from West Africa this month as OPEC's supply cuts allow other countries to gain a greater share in the Asian market. West African producers led by Angola and Nigeria are set to send crude to China at the rate of 1.48 million bpd in April. Overall Asian imports of West African crude are expected to reach 2.4 million bpd this month.
China's apparent oil demand increased by 5.3% on the year in the first two months of 2017 to 11.65 million bpd.
Colonial Pipeline is allocating Cycle 22 shipments on Line 2, its main distillate line from Houston, Texas to Greensboro, North Carolina.
Gasoline stocks held in independent storage in the Amsterdam-Rotterdam-Antwerp terminal in the week ending April 6th increased by 11.62% on the week but fell by 14.18% on the year to 1.095 million tons. Gasoil stocks fell by 0.76% on the week and by 6.19% on the year to 3.261 million tons.
Early Market Call - as of 9:00 AM EDT
WTI - May $51.85, up 15 cents
RBOB - May $1.7264, down 33 points
HO - May $1.6171, up 42 points