Oil Stays Lower as U.S. Fuel Stocks Rise More Than Forecast
Investing.com - Crude prices stayed lower on Wednesday, after data showed a sizable gain in U.S. gasoline stockpiles.
The U.S. Energy Information Administration said in its weekly report that gasoline inventories increased by 6.8 million barrels in the week ended Dec. 1., much higher than expectations for a gain of 1.7 million barrels. For distillate inventories including diesel, the EIA reported a gain of 1.7 million barrels.
The report also showed that crude oil inventories fell by 5.6 million barrels last week. That compared with analysts' expectations for a decline of 3.4 million barrels, while the American Petroleum Institute late Tuesday reported a supply-drop of around 5.5 million barrels.
Supplies at Cushing, Oklahoma, the key delivery point for Nymex crude, decreased by 2.75 million barrels last week, the EIA said.
Total U.S. crude oil inventories stood at 448.1 million barrels as of last week, which the EIA considered to be in the middle of the average range for this time of year.
U.S. crude oil imports averaged 7.2 million barrels per day last week, down by 127,000 barrels per day from the previous week.
U.S. West Texas Intermediate (WTI) crude futures lost 82 cents, or about 1.4%, to $56.80 a barrel by 10:35AM ET (1535GMT). Prices were at around $56.84 prior to the release of the inventory data.
Meanwhile, Brent crude futures, the benchmark for oil prices outside the U.S., were at $62.18 a barrel, down 66 cents, or 1.1%, from their last close.
Oil prices notched a slight gain in a rangebound session Tuesday, supported by OPEC’s agreement to extend production cuts through next year.
The producer group, along with some non-OPEC members led by Russia, agreed last week to extend current oil output cuts for a further nine months until the end of 2018. The deal to cut oil output by 1.8 million barrels a day (bpd) was adopted last winter by OPEC, Russia and nine other global producers. The agreement was due to end in March 2018, having already been extended once.
The OPEC-led production cuts have been one of the key catalyst supporting the recent rally in oil prices amid expectations that rebalancing in crude markets are well underway.
However, fears that rising U.S. output would dampen OPEC’s efforts to rid the market of excess supplies are prevented prices from rising much further, according to market participants.
In other energy trading, gasoline futures shed 1.1 cents, or 0.7%, to $1.690 a gallon, while heating oil lost 2.4 cents to $1.889 a gallon.
Natural gas futures held steady at $2.913 per million British thermal units.
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