Like their counterparts in Europe, U.S. indices are expected to start the final trading session of the week in the red as earnings season continues to underwhelm on both continents and the economic data doesn’t give much to be happier about.
Spring is busting out all over, and so is gasoline demand. Low gas prices are causing a buying frenzy at the pump as gasoline demand in the month of March hit an all-time record high. According to the American Petroleum Institute (API) the lowest average price for regular unleaded gasoline in 12 years has Americans guzzling gas like never before.
Saudi Arabia is close to securing a $10 billion, five-year bank loan, the government's first significant foreign borrowing for over a decade, as the world's top oil exporter seeks to fill a record budget gap caused by low crude prices.
Brent and WTI crude are coming under pressure again on Wednesday after oil workers in Kuwait agreed to end their strike against wage and job cuts and work to return output to pre-strike levels. Despite an initial sell-off on Monday, the strike in Kuwait which wiped out the 1.5 million barrels of excess supply each day, had managed to more than offset the disappointment at the lack of a deal in Doha over the weekend that would have seen a number of major oil producers freeze output.
Crude oil prices are retracing this morning after another build in U.S. crude oil stocks reported by the API late yesterday afternoon along with news that the Kuwait oil workers’ strike is over after three days. Kuwait production is going to ramp up quickly with Reuter’s reporting that production already increased by 500,000 bpd today with expectations that Kuwaiti production will reach the average March level in a few more days.
President Obama is landing in Saudi Arabia to try to smooth over sour relations with America’s long-term ally, Saudi Arabia. While the crude oil market is selling off overnight on renewed concerns about China’s economy and the ending of the Kuwaiti oil strike, this meeting today may have more of a long term impact on the future of oil prices then some of these short term factors.