And it's shaping up to be another fun week in the crude complex, with OPEC releasing its monthly oil market report on Tuesday, swiftly followed by the IEA's monthly oil market report the day after. As oil is looking a little steadier after reaching our downside target, hark, here are five things to consider in oil markets today:
3) The chart below is pretty epic in highlighting how U.S. oil and product inventories remain a million miles away from the 2012-16 average, but just a smidge away from the record high set in the week ending February 10 at 1,359,941,000 barrels.
The IEA has confirmed that OECD oil and product inventories fell 800,000 bpd in Q4, the biggest drop in three years. So far in 2017, U.S. oil and product inventories are up 24.9mn bbls - or 400,000 bpd. As for crude inventories on their own, they are up 49.4mn bbls, or 800,000 bpd: last quarter's drop is being completely offset by the rise in U.S. crude inventories so far this year.
4) Oil services company Wood Group has just announced its acquisition of Amec Foster Wheeler in a deal worth $2.7 billion. The acquisition follows other consolidation in the industry (hark, GE & Baker Hughes last year), and is estimated to create $134 million of savings. As the chart below from Rystad Energy illustrates, combined synergies puts the company in a much more dominant position, with further consolidation across the sector likely.
5) Finally, the swift and sharp drop in oil prices in the last week is helping to rein in retail gasoline prices - right at the time that we see them seasonally pushing higher, amid seasonal maintenance ahead of driving season and the switch to the summer gasoline blend.
The national average has already started to totter, while South Carolina - one of the cheapest states in the U.S. - is holding below $2/gal. California, on the other hand, is breaking above $3/gal for the first time since 2015 amid refinery issues and tighter fuel standards.