The West Coast saw a huge crude oil build, but for traders, the left coast is sometimes the left-out coast. Barrels out west are sometimes erratic and really does not reflect the larger picture when it comes to the larger oil supply and demand picture in terms of the West Texas Intermediate delivery point. So, one must respect West coast barrels, but if you leave them out as many traders do, it shows that crude oil supply in the East Coast, Gulf Coast and in the Rocky Mountain region is a much tighter market. You then must look at more geopolitical and production woes like the fact that the IMF is threatening to kick out Venezuela from the group, cutting off one of their lifeline for cash and the fact that it looks increasingly likely that the United States is going to pull out of the Iranian nuclear deal.
The Energy Information Administration reported that crude supply spiked by 6.2 million barrels, which almost 5 million barrels of that build were in the West Coast. Throw out the West Coast and consider the fact that the SPR released 450,000 barrels of supply the number does not look nearly as bearish. Even if you assume that every barrel should be counted equally then you still have to say that despite the big increase, supply overall is below the average ranger for supply.
The International Monetary Fund (IMF) is threatening to expel Venezuela for the lack of paperwork and not explaining what the heck they do with the money that they are given. Reigniting market concerns over the struggling nation’s crude production, Market Watch reported that “The IMF said it has issued a “declaration of censure” against Venezuela for its failure to implement certain remedial measures and failure to comply with specific obligations. The IMF said it called on Venezuela “to adopt specific remedial measures and will meet again within 6 months to consider Venezuela’s progress in implementation.”
“It is another nail in the coffin for the Venezuelan oil industry,” said Phil Flynn, a senior market analyst at Price Futures Group. “The IMF could be a lifeline for cash that may dry up if they are booted out.