Crude oil prices recovered after another shocking increase in oil inventory after traders started to focus on the fact that refiners are beginning the long road out of seasonal maintenance. The 5.0-million-barrel crude supply increase was driven by a huge 902,000-barrel increase in crude imports mainly from Canada of all places and a slight 20,000 barrel a day in U.S. oil production. U.S. oil production hit 9.129 million barrels per day, slightly above one year ago but still down from the 9.422 million barrels a day we were pumping two years ago.
The Trump jitters have returned with a vengeance this week with global stocks coming under renewed selling pressure as uncertainty mounts over Donald Trump’s proposed economic growth agenda. Asian shares were vulnerable to steep losses during early trading on Wednesday posting their largest drop in two weeks amid the risk-off trading mood.
For the first time in over five months, U.S. stock indices suffered losses of one percent or more in a single session. Some said it was the end of the so called “Trumpflation” trade, some blamed crude oil and others cited a combination of these and other factors. Whatever the reason, it was a sizeable move. The signs were all there. Safe haven gold and Japanese yen had been rising since December.
Normally, when crude oil makes a decisive move it is usually because of oil inventories or a headline out of the Middle East. Yesterday oil moved because of healthcare uncertainty. Speaker of the House Paul Ryan may get a bit of a complex because as soon as his press conference began about the American Healthcare Act the stock market became unglued and sold off, dragging the oil market down with it.
Crude oil prices sold off yesterday as the Libyan government says they will re-open closed oil ports after fighting stopped Libyan crude exports for the last two weeks. Yet, one cannot count on the promise of Libyan oil as they have yet to prove they can be a reliable supplier. Still, oil is on the rise again as a weakening dollar and the promise that OPEC might extend production cuts and the fact that refiners will soon rise again out of maintenance is giving the bulls some new life.
The euro climbed to six-week highs and sentiment toward French assets was lifted on Tuesday after centrist Emmanuel Macron's performance in a television debate boosted a view he would win France's presidential race over the far-right's Marine Le Pen.