Oil prices are steady as we await confirmation from the EIA of a massive build in supplies. The IEA also just released their monthly oil market assessment and also lowered global oil consumption slightly for 2013.
Oil market participants have moved into a risk-off mode as the geopolitical tensions ease, supply from Libya starts to increase all being offset partially by the ongoing QE program in the U.S. but negatively impacted by the U.S. government shutdown.
Oil prices have continued to move higher in anticipation of a friendly outcome to today’s U.S. FOMC meeting. The market has been trading this week on a view that the Fed will remain status quo on its QE.
The oil complex is becoming more and more convinced that the Iranian negotiations will make progress and as such oil prices declined across the board on Tuesday. Further, skepticism that the U.S. politicians in Washington will not be able to come up with a deal weighted on oil.
The overall fundamental picture has not changed this week with oil stocks in the U.S. at the highest level in more than 25 years. Simply put, oil is well supplied with supply still outstripping demand.