Brent oil tumbled below $102 a barrel on May 15 after latest data revealed worsening in all of Europes major economies, including France falling in recession. Germany dodged contraction of its economy as consumption increased, but its GDP growth was barely enough to compensate for Europes economy slowdown as a whole. This marked a record long recession period for the single currency block, which together with a still strong dollar and growing reserves in the United States keep laying pressure on both the WTI and Brent benchmarks.
The Energy Information Administrations weekly report on U.S. oil reserves today will bring some light on demand and will also influence Brent. An increase of 400 000 barrels is expected by economists surveyed by Bloomberg, which if confirmed should pressure prices down.
Andrey Kryuchenkov, an analyst at VTB Capital in London, said for Bloomberg: “The world will remain well-supplied. Higher prices lately have triggered a boost to capacity that will continue to outpace slack post-crisis demand growth.”
The industry-funded American Petroleum Institute reported yesterday that U.S. crude inventories rose by 1.1 million barrels last week, while gasoline stockpiles declined by 480 000 barrels. Distillate fuel inventories gained 1.9 million barrels, the institute said. APIs data however is considered as less reliable than EIAs statistics as it is based on voluntary information from operators of refineries, pipelines and bulk terminals.
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