API crude oil stocks showed their first weekly decline in 4-months, with inventories declining 1.500 million barrels. Although unconfirmed until EIA data is released later in the session, Cushing facilities have seen some relief with the drawdown seeing 336,000 barrels leave storage. Oil prices continue to trend higher on the back of a pickup in demand as threats to oil transit routes raise the upside risks for prices. Increasingly aggressive behavior has forced the United States navy to escort any US-flagged commercial vessels through the Strait of Hormuz to prevent any possible conflict that could upset delicate nuclear negotiations. With US oil companies in Iran to discuss possible collaboration on projects hinging on completion of a nuclear deal, the possibility of sanctions being lifted could see substantial oil production hit the market in coming months, denting recent gains in prices.
Oil Inventory Growth Reverses
Daily Analysis - 06/05/2015