Oil production from the OPEC cartel is falling led by a drop from the nuclear ambitious Iranian regime. As reported by Dow Jones oil production from Iran fell below 3 million barrels in the month of June. At the same time our friendly cartel is predicting that global oil demand growth will fall to only 800,000 barrels a day a prediction that may put more pressure on producers to cut back on production. OPEC is now saying that 2013 oil demand will average only 89.5 million barrels a day and that there prediction comes of considerable uncertainties.
Geo-political uncertainties are also heating up! According to Dow Jones China told Japan on Wednesday it should respect Beijing's indisputable sovereignty over disputed islands in the East China Sea as tension flared again between the countries. China Foreign Minister Yang Liechi met with Japanese counterpart Koichiro Gemba in Phnom Penh where he reaffirmed China's principled position on the islands known as Senkaku in Japanese and Diaoyu in Chinese. He stressed that Diaoyu Islands and their affiliated islets have always been China's territory since ancient times, over which China has indisputable sovereignty, said a statement from the Chinese delegation.
The Fed Minutes could be key for the market as traders will try to get a sense just how close the Fed is to a possible QE3d. If the market gets a sense that QE is just around the corner than oil could flay. If they sense that QE is far off in the distance oil should fall.
The API showed a surprise build in gasoline supply showing an increase of 2.5 million barrels. As far as crude stocks they showed a drop of 695,00 barrels and distillate stocks off 717,00 barrels.
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