Oil - Bullish move capped by record US crude exports

Omkar Godbole FXStreet Contributor

Oil prices on both sides of the Atlantic are trading flat this Thursday morning in Asia on fears that record US crude exports would derail the oil market rebalancing.

At press time, Brent oil is trading 8 cents higher at $55.88/barrel. WTI oil is dead flat at $50.00 levels.

The bid tone weakened during the overnight trade after the Energy Information Administration (EIA) said late on Wednesday that US crude oil exports jumped to 1.98 million barrels per day (bpd) last week, surpassing the 1.5 million bpd record set the previous week.

Meanwhile, the demand side of the story is seen deteriorating in the long-run. As per Reuters report, analysts at Barclays bank said oil demand could be seriously dented by improving fuel efficiency and the rise of electric vehicles (EV). "EV uptake and increased fleet fuel efficiency could cut oil demand by around 3.5 million bpd in 2025," the bank said.

However, the downside remains capped on speculation that OPEC and non-OPEC members may extend the oil output cut deal beyond March 2018. Russian President Vladimir Putin said on Wednesday that the pledge between OPEC and other producers, including Russia, to cut oil output could be extended to the end of 2018.

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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