Oil spot price: Markets await Fed and EIA inventories

on Dec 18, 2013
Updated: Oct 21, 2019
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_iNVEZZ.com: Wednesday, December 18th:_

**Crude oil**
The West Texas Intermediate crude price increased yesterday following data on US oil inventories released by the American Petroleum Institute (API). Oil stocks decreased by 2.5 million barrels in the week ending 13 December.
The US Energy Information Administration (EIA) will publish the official oil supplies data at 15.30 UTC today. Analysts expect a drop of 2.4 million barrels from last week, while a survey by Bloomberg projects a decline of three million barrels.

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The API reported that gasoline inventories dropped by 481,000 barrels last week. Distillate stocks, including diesel and heating oil, fell by 434,000 barrels. According to a Bloomberg survey, the EIA is expected to announce a rise of 1.5 million in gasoline stockpiles and no change in distillate stocks.
However, today all eyes are on the US Fed meeting. At 19.00 UTC, market participants will find out whether the FOMC has decided to taper its $85 billion a month quantitative easing programme and change interest rates from the current zero to 0.25 percent range.

According to a Bloomberg survey of 67 economists the Fed will maintain its Treasury purchases at $45 billion a month, and mortgage-backed securities at $40 billion. About 34 percent of economists surveyed on 6 December forecast a taper, which is double that of the 8 November Bloomberg survey.

David Lennox, an analyst on resource at Sydney’s Fat Prophets says that “markets are focused on the Fed decision”. He adds that “refining has been running at a high rate, and there appears to be a lot of finished product in the system”.
The spread between WTI and Brent yesterday was $10.78, the narrowest based on closing prices since 8 November. At the moment WTI is trading at $97.39 and Brent is at $107.92.

Yesterday, it was reported that Russia planned to restart oil supplies through a pipeline to Ukraine’s Odessa refinery in Q1 2014. The supply schedule, yet to be approved by the Energy Ministry, foresees supplies of 750,000 tonnes of oil to the refinery controlled by the VETEK group.
**Natural gas**
Gazprom’s Chief Executive Alexei Miller was yesterday quoted as saying, by Interfax news agency, that the world’s biggest gas producer may sign a contract with China at the end of February. In September, Gazprom and its Chinese counterpart CNPC agreed on the outline terms of a contract, including volumes, payment, when deliveries should start, a ‘take-or-pay’ amendment. They didn’t agree a price but said they expected to finalise the deal by the end of this year.
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