EIA raises Brent price forecast to $55 for 2017

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Nationwide stockpiles are at 494.8 million barrels, the highest seasonal level in more than three decades, according to weekly data compiled by the EIA since 1982.

Philip Verleger, president at PKVerleger, is even more downbeat than Kilduff: he predicted that if OPEC stumbles in its output cuts and if the border-adjustment tax proposed by USA president Donald Trump falters, "we're set up for probably the hugest sell off of crude in history; right now open interest has come up 11 percent since the [U.S.] election, and we're on track to having nearly 8 million contracts by the end of the year if this rate continues".

The price for Brent crude oil was 0.5 percent below yesterday's close to $54.78 per barrel about a half hour before USA markets opened.

Overall, the EIA forecasts Brent crude oil prices to average $55 per barrel in 2017 and $57 per barrel in 2018, West Texas Intermediate (WTI) crude oil prices are forecast to average about $1 per barrel less than Brent in 2017. "We should start to see imports decline in the next few weeks".

US gasoline futures fell to $1.4875 a gallon, after dropping earlier in the session below the 200 day moving average on a continuous chart, a bearish technical signal.

The agency reported that declining refinery operations due to an oversupply of gasoline and other distillates due to falling demand helped create the outsized inventory build.

Crude inventories at 508.6 million barrels are 8.1% higher than year-ago levels. The American Petroleum Institute reported a 14.2 million-barrel increase late Tuesday. Global oil output was cut by 1,4 million bpd last month, said Russian Energy Minister Alexander Novak. It is the third largest oil producing country worldwide, if the United States sanctions affect the country's production rate on a big scale, analysts believe that oil prices are definitely expected to surge as a side-effect. Data from the Energy Information Administration revealed a 13.8 million-barrel weekly jump in USA crude supplies-the second-largest on record-but also showed an unexpected decline in gasoline inventories. Instead of cutting production to combat the global supply glut, the country has instead quietly been sitting on the sidelines, enjoying the OPEC-fueled bump in oil prices.

Beyond rising drilling activity, there are also concerns that USA gasoline consumption, a key pillar for crude oil demand, is stalling.

USA crude production rose 0.6% to 8.978 million barrels per day, the first increase in three weeks, according to the EIA.

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