The July Brent futures flat price has had an action-packed afternoon. Having initially found resistance at $85.30/bbl, prices dropped to $84.80/bbl, before immediately rallying to the afternoon’s high of $85.80/bbl. Subsequently, from 15:30 BST onwards, the price collapsed below $84/bbl and is hovering around $83.75/bbl at 17:15 BST (time of writing). EIA inventory data released today at 15:30 BST revealed an enormous build in US crude inventories of 7.3mbbls up to 1,608mbbls, confounding the median estimate of a 2.5mbbls draw and sending physical markets into a bearish frenzy. Also in the announcement was news that US gasoline and distillates inventories have declined by 1.5mbbls and 2.2mbbls, respectively. OPEC production is reportedly steady, according to the producer group, with the increase in Libyan and Iraqi production being offset by Iran and Nigeria’s production. Finally, the crude intake of Chinese refineries fell by 919kbbls/d in February to 14.4mbbls/d, a 7-month low. The front and 6-month Brent futures spreads are $0.61/bbl and $3.54/bbl respectively.
