HardAssetsInvestor

Written by Sumit Roy  |

January 25, 2012

Crude Oil Report: Market Shrugs After EU Embargoes Iranian Oil

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European Union’s embargo of Iranian oil wasn’t enough to break crude oil out of its recent range.

The Department of Energy reported this morning that in the week ending Jan. 20, U.S. crude oil inventories increased by 3.6 million barrels, gasoline inventories decreased by 0.4 million barrels, distillate inventories decreased by 2.5 million barrels and total petroleum inventories decreased by 4.3 million barrels.

Crude oil prices were little changed after the latest figures, with Brent and WTI near $110 and $99, respectively.

It was a relatively slow week for news flow in the crude oil market. The European Union made official its embargo of Iranian crude oil, as had been proposed a few weeks ago.

But as many had anticipated, existing contracts will not be affected by the ban for six months, giving member countries time to secure alternative supplies. The EU will revisit the ban in May to evaluate the impact of the embargo.

Altogether, countries in the EU import close to 500 Kbbl/d from Iran. To read more about the Iranian oil embargo’s impact on the crude oil market, see our report from earlier this month.

Meanwhile, the technical outlook for Brent and WTI is largely unchanged. The former is trapped in a $100 to $115 range, while the latter fluctuates just above and below $100.