EIA expects rise in global oil consumption

USA oil demand fell by 1.4 million barrel a day to 19.34 million barrel a day.

"To add to this, OPEC could face a brewing political crisis as two key members have broken diplomatic ties with Qatar". Demand was soft, too, but America's shale is changing the balance of power.

The U.S.'s oil imports rose 356,000 barrels per day (bpd) to 8.34 million bpd last week, according to the EIA data. Forecasters had predicted a decline in inventories. West Texas Intermediate light sweet crude futures were trading at just above $46 a barrel. The global Brent crude benchmark climbed as high as $50.74 on Monday in Asia before closing lower at $49.

Greg McKenna, chief market strategist at futures brokerage AxiTrader, said there was "a real chance" OPEC solidarity surrounding its production cuts may fracture.

In this video, Stratas Advisors' executive vice president John Paisie explains the geopolitical, currency, trade, operational and supply factors contributing this week's oil prices.

Inventories at Cushing fell by 1.6 MMbbls between May 26, 2017, and June 2, 2017, according to the API.

The U.S. Energy Information Administration report on oil inventories is due this week on Wednesday at 10:30 a.m. EDT.

Yet, one factor that should be noted: in the report, there was a drop in USA crude oil production which fell for the first time in eight months by 20,000 barrels, which may be a sign that we are getting close to a USA production plateau.

The U.S. Department of Energy noted that continuing production from non-OPEC countries will slow down the pace of global oil inventory reduction in 2017 and lead to a small inventory buildup in 2018.

World fuel production and consumption is roughly in balance, at nearly 98 million bpd, although inventories remain bloated, the U.S. Energy Information Administration (EIA) said on Tuesday.

OPEC and other producers including Russian Federation have pledged to cut about 1.8 million barrels per day (bpd) to help reduce global inventories. The increase was driven by surging production in Libya and Nigeria, both of which are exempt from the cartel's agreed production cuts. "We believe that USA inventories will continue falling this summer, allowing OPEC to point to lower stocks as a positive measure of success", Sandy Fielden, director of oil and products research at Morningstar said in a note.

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