A modest rally in the crude price yesterday was mainly due to the weakening greenback as well as further comments from Mr al-Naimi suggesting that oil demand will definitely pick up in the second half of the year. It is certainly going to have to if the latest production numbers are to be believed. Following my comments about Opec production in May yesterday there are some more detailed numbers on a country by country basis around. With Saudi production staying at 10.25m b/d it was Iraq that upped its game with production of 3.87m b/d of which they exported 3.15m b/d apparently, this was nearly 200/- b/d up from the previous month. Add to that the USA production in the week ending 22/5 of 9.57m b/d which is the highest for 43 years (the fall last week was as I guessed, due to Alaskan maintenance) and further pressure is applied. Finally even Russia is squeezing more oil out, its production in the month was 10.71m b/d, up 1.6% y/y of which they exported 5.06m b/d. The good news is that US demand, particularly for gasoline is still strong. Figures for the first three weeks of May show oil demand of 20.289m b/d, up from 19.104m last year and 18.687m in 2013, no sign of reducing fossil fuel here then…

The API inventory figures, released after the close foxed the analysts community again coming in at a build of 1.8m barrels when the teenage scribblers had it down as a likely draw, never mind chaps, better luck next time. That was enough to drop the crude prices by around 50 cents in early trading today as the market worries that the expected draw in EIA stocks may come to an end with their numbers tonight.

Opec gossip is now at its peak and a number of investment banks have decided to veer towards an increase in the 30m b/d Opec production figure at Friday’s meeting. To be honest it matters not, as I wrote yesterday the cartel is over-producing by well over a million barrels a day so they can pretty much say what they want, why not say it like it really is and be done with it…