West Texas Intermediate crude was coming into today’s inventories report weakened. Traders have seen the price of crude fall from $100.50 per barrel to just below $94 per barrel just prior to the data. Crude futures continues its run lower after the Energy Information Administration (EIA) reported that inventories dropped more-than-the-expected general consensus 1.6 million barrels – Platts survey was looking for a decline of 3.3 million barrels – in the week ending on January 3. However, gasoline and distillate supplies rose on weaker demand.
“The big build in products should mean weaker crude prices,” said Micheal Lynch of Strategic Energy & Economic Research. Lynch thinks the build-up could potentially send crude through $90 per barrel. I, myself, thought the massive bearishness during the end of 2013 would do the trick, but a much needed pullback after a $20 dollar decline was inevitable.
Crude futures in down .77 percent to $92.95 per barrel as bearishness over crude by-product buildups stop any potential rally. The EIA data showed increase in gas stockpiles by 6.24 million barrels, totaling 227 million, which outpaced the 2.5 million barrel expected jump. Distillate supplies gains 5.83 million barrels, totaling 125 million and the most since October. This was over double of what the market forecasted.
Across the Atlantic, Ivory Coast is looking to increase its crude output as the Prime Minister Daniel Kablan Duncan said output will be boosted within the next five years to 200,000 barrels per day. The African nation is already bountiful in industrious metals and diamonds, but the upgrade in oil output will return oil stability in the region. Ghana, neighbor to the Ivory Coast, already produces 100,000 barrels per day but is looking to increase those totals to 250,000 by 2021.
Prime Minister Duncan said the Ivory Coast has roughly 50 oil blocks, which 25 half been rewarded. The country is looking to get outside firms into the country’s energy sector because technical difficulties were hampering output. “We expect to add at least five wells a year,” said Duncan.