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Last week oil prices were dominated by a rebound in the equity markets and the prospects for another production cut at yesterday’s OPEC meeting. All week a stream of mixed signals emerged from various OPEC sources as members pondered the issue of another cut. Starting the week at $47 a barrel, oil fell as low as $42 and then rebounded to close at $46.
The weekly US stocks report contained more mixed signals with crude stocks increasing by 700,000 barrels rather than falling 1 million as expected. Given the economic situation, US gasoline consumption seems to be surprisingly strong with consumption reported as increasing by 1.6 percent over the same four weeks last year. These unadjusted consumption numbers, however, are likely to be revised. The current price of gasoline is, of course, $1.28 a gallon lower than at this time last year.
Tanker tracker Oil Movements reports that partial, preliminary information for March exports suggests that there will be at least another 350,000 b/d drop in OPEC oil shipments during March.
Just prior to yesterday’s OPEC meeting, Iran’s Oil Minister told reporters that his country was fully complying with its quota and is currently exporting about 2.2 million b/d. Russia’s Deputy Prime Minster, who is also attending the OPEC meeting, told reporters that Russia will cut oil exports and increase domestic oil consumption in an effort to support world prices. He also indicated that Moscow is ready to consider joining OPEC “if all Russian accords and proposals were met.”