When you reach the end of your rope, tie a knot in it and hang on.

Franklin D. Roosevelt

Oil prices remain on the defensive after a larger than expected build in total U.S. crude oil stocks reported by the API late yesterday afternoon. This came after the Saudi Oil Minister ruled out any change in Saudi Arabia’s strategy in a speech on Tuesday morning. Saudi Arabia will continue with its market share strategy. He also said that production cuts would not happen until more countries agree to a freeze in production.

A production freezing deal at January record high levels will do little to accelerate a return to more normal global supply and demand conditions in my opinion. With nothing changing on the horizon, the perception view is losing some if its momentum after yesterday’s status quo speech by Saudi Minister Naimi.

Ahead of this morning’s more widely watched EIA oil inventory snapshot the reality view is the dominant trading view with oil prices now lower on the week to date and following last week’s trading pattern. At the moment all signs still suggest that supply is continuing to strongly outstrip demand and is projected to continue in this pattern through 2016 and into early 2017. Unless the perception view regains momentum and/or a supply deal by OPEC and select non-OPEC countries materializes with a clear path toward accelerated rebalancing the market is likely to retest the Jan lows.

Global equites returned to the selling mode with the EMI Global Equity Index declining by 1.33% with the year-to-date loss widening to 7.9%. Five of the 10 bourses in the Index are now showing double digit losses for 2016. China remains the worst performer in the Index while Canada is still showing the smallest year-to-date loss. Global equities were a negative price directional catalyst for the oil markets over the last 24 hours.

The API released their data late Wednesday afternoon a larger than expected build in total U.S. crude oil stocks and in Cushing. They reported a draw of distillate fuel and a small build in gasoline stocks. U.S. crude oil stocks increased by 7.1 million barrels with Cushing inventories increasing by about 0.3 million bbls on the week. They also reported a 0.3 million bbl draw in distillate fuel and a 0.6 million bbl build in gasoline stocks. Total combined inventories of crude oil and refined products were strongly higher on the week.