Despite OPEC on the edge of record conformity of 90% in reducing oil production, this week's EIA oil inventory report released bearish data.
U.S. commercial crude inventories have found record highs at 518.1 million barrels, which is an increase by 9.5 million from the previous week; gasoline stock piles topped for an all time high, rising by 2.8 million barrels, for a current 259.1 million barrel pile.
Investors in oil related funds are being nipped due to the report. Energy Select Sector SPDR ETF XLE is down 0.46%, United States Brent Oil Fund BNO is down 0.13%, and United States Oil Fund ETF USO is down 0.09%.
Builds Due to Decreased Demand
Since the end of 2016, EIA data shows that gasoline inventories have jumped by 10%. However, the last 4 weeks has seen a decrease of overall demand by 5.3% year-on-year. Demand for gasoline in the U.S. sits at 8.43 million barrels per day.
"A build in gasoline stock is in tandem with seasonal norms and further builds are expected in the coming weeks as demand for the fuel remains low" commented Abishek Kumar, senior energy analyst at Interfax Energy's Global Gas Analytics.
An OPEC Update
OPEC has had a strong start in 2017 in reducing output to increase oil prices . However, with this, compliance nation-by-nation is mixed.
Saudi Arabia, the world's largest oil producer, has been dedicated to making the deal work and is expecting to reduce output by more than listed in agreements. Iraq was reported to only comply by 40%. Other non-OPEC nations, such as Russia, have minimally reduced output but their adherence is expected to increase.
In the last five years, oil has seen a wild series of price fluctuations. From a barrel of crude trading over $100 in 2013 to below $30 in 2016, the move to push global oil prices upwards is in play by OPEC. WTI crude oil is currently at $53.20 a barrel.
As discussions and overall world compliance in oil production increases, it looks like OPEC's endeavors for the long run will find success in increasing oil prices.
Stocks that Aren't in the News. Yet.
You are invited to download the full, up-to-the-minute list of 220 Zacks Rank #1 "Strong Buys" free of charge. Many of these companies are almost unheard of by the general public and just starting to get noticed by Wall Street. They have been pinpointed by the Zacks system that nearly tripled the market from 1988 through 2015 with a stellar average gain of +26% per year. See these high-potential stocks free >>