Oil inventories are beginning to fall in some regions as demand outpaces supply constrained by deep production cuts from OPEC leader Saudi Arabia, providing support for prices which are expected to rise in coming months. JP Morgan analysts said this month that oil inventories - which include crude and fuel products - now play a bigger role in determining oil prices than the U.S. dollar because Western sanctions on Russia have accelerated oil trading in other currencies. Both the International Energy Agency (IEA) and the Organization of the Petroleum Exporting Countries (OPEC) expect oil demand to outpace supply this year, leading to overall inventory draws to the tune of 400,000 to 500,000 barrels per day (bpd), mostly accounted for by the second half of the year.
"We expect stocks to draw relatively aggressively in July, and by the end of August, we should be through the stock builds that we saw in the first half of the year," said Christopher Haines, an analyst at Energy Aspects.
Oil inventory drops set stage for higher prices reuters.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from reuters.com Daily Mail and Mail on Sunday newspapers.
Oil
inventories are beginning to fall in some regions as demand
outpaces supply constrained by deep production cuts from OPEC
leader Saudi Arabia, providing support for prices which are
expected to.