Following the report by the American Petroleum Institute (API) that US oil inventories have decreased remarkably during the past week, the price of oil has regained some ground. US stocks went down 8.7 million barrels, a much bigger drop than the expected 2.5 million. The stocks are currently estimated at 513.2 million barrels as of the week of 26 May, among the lowest levels of recent weeks.
However, beyond the API news, the market doesn’t have much to offer optimists, according to Gao Jian, energy consultant at Shandong SCI International.
OPEC output cuts extension notwithstanding, the United States may continue to expand its shale oil production causing and increase in the volume of the reserves and slowing down the oil price climb. In the meantime, a Moscow-Riyadh axis is forming.
The two oil powerhouses have recently held a series of negotiations in order to begin cooperating in the development of Oil&Gas technologies. Observers have dubbed the odd detente an "axis of love."