Oil steady as USA refining demand rises but ample crude supplies weigh

Ebony Scott
September 11, 2017

This has provided a support for crude oil prices, as have reports of another three storms brewing in the area of the Gulf, with the potential of growing to hurricanes, causing further shutdowns and damage.

Hedge funds and other money managers increased their combined net long position in the five major petroleum contracts linked to crude, gasoline and heating oil by 46 million barrels in the week to September 5, according to the latest regulatory and exchange data. The year high is $54.45, and the low is $42.53.

Oil prices were mixed with global benchmark Brent Crude down 0.41% recently, while USA benchmark West Texas Intermediate was up 0.51% amid rumors about possible extension of OPEC's output cut deal.

When it was implemented in January, the OPEC-led effort was seen as helping to establish a $50 per barrel floor under the price of Brent. According to the latest estimate from commodity pricing group S&P Global Platts, production in August from both countries combined was about a half million barrels per day above the level from October, the month used by OPEC as a peg to gauge cuts and quotas.

Gasoline inventories fell 2.5 million barrels.

Brent Crude Oil
Weekly December Brent Crude Oil

Buckeye Partners, the largest owner of oil storage facilities in the Caribbean, with 41.1 million barrels of capacity, on Thursday shut its Yabucoa oil terminal in Puerto Rico ahead of Hurricane Irma and was preparing for the storm at two other marine terminals in Florida and the Bahamas.

Meanwhile, Saudi Arabia-the world's largest exporter of crude oil-said Sunday that the country's energy minister and his Venezuelan counterpart had discussed the possibility of extending OPEC's oil output cut deal beyond the March 2018 expiration date. When the value falls, commodity prices increase because more dollars are required to purchase the same quantity as when the value was higher. The growth consensus for non-farm productivity is 1.3%, compared to 0.9% in the previous quarter.

The group raise its combined futures and options position in NY and London by 20,525 contracts to 186,421 during the period. Prices slid $1.61 to close at $47.48 on Friday, the most since July 5.

The report from Baker Hughes shows that the numbers of operating rigs in the United States declined to the lowest since June this year. The IPO would make the company more interested in pushing for a higher price of oil, he said.

Almost all the position changes came from WTI, where hedge funds became much less bearish about the supply situations as refineries began to restart.

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Other reports by GizPress

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