Oil Price - April 21

[dan_s]

Comments below are from OilPrice.com
> As I have been saying for many weeks in my podcasts: As long as oil prices stay within the rising wedge formation that has been in place for a year, the outlook for higher oil prices is still quite good. Today there is support for WTI at $48 and at $46, but VERY STRONG resistance right below $55. I think WTI will stay range bound until the official OPEC announcement to extent the production cut agreement. There is a hell of a lot of money at stake for the OPEC cartel members, so I think it will be extended with or without Russia. The "official" announcement is due on May 25, but there will be plenty of "unofficial" reports before that date.
> It is pure crap that the rise in gasoline inventories was "unexpected". Refiners have been ramping up summer blend gasoline production for several weeks. This is exactly when gasoline inventories s/b rising. The refiners are not going to "turn off" as the analyst told the WSJ. When have the refiners ever "turned off"?
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Friday, April 21, 2017

Oil is heading for its largest weekly drop in over a month as doubts resurfaced over OPEC’s resolve. That comes despite the highly optimistic comments from top officials from Saudi Arabia and Kuwait. There seems to be a growing consensus within OPEC in favor of an extension of the deal. But the one holdout could be Russia, without which an extension is uncertain. Russia’s energy minister Alexander Novak was guarded when asked about Russia’s support for an extension, declining to take a position while citing progress that has already been made in the reduction of oil stocks. "The situation has gradually been improving since the beginning of March," Novak said to reporters.

Goldman says ignore the crude selloff. Oil was down sharply over the past few days, but Goldman Sachs tried to reassure the markets, saying that there is no evidence to justify the price declines. The investment bank tells investors to keep their focus, pointing to ongoing declines in crude oil inventories, drawdowns that are expected to pick up pace this quarter. Goldman says this week’s price declines of about 4 percent were driven more by speculative moves than the fundamentals. As a result, prices should firm up.

Gasoline stocks rise unexpectedly. Goldman says there is nothing to worry about, but the U.S. EIA reported an unexpected increase in gasoline stocks last week, raising fears of softer-than-expected demand. The stock build sent a shudder through the oil market this week. “If there’s too much gasoline, then refineries turn off and that’s bad for crude. This is the first week it has really been a concern,” Sam Margolin, an analyst at Cowen & Co., told the WSJ.