Crude tumbles after shock increases in stored oil and production

Ivan Schwartz
November 11, 2017

Oil prices settled slightly lower on Wednesday after USA government data showed rising domestic crude production, a surprise build in US stockpiles and a decline in monthly Chinese crude imports, a triple blow that was offset somewhat by rising tensions in the Middle East.

A maze of crude oil pipes and valves is pictured during a tour by the Department of Energy at the Strategic Petroleum Reserve in Freeport, Texas, U.S. June 9, 2016.

The U.S. Energy Information Administration reported that domestic crude supplies rose ( by 2.2 million barrels for the week ended November 3.

Output from USA oil wells climbed by 0.7% last week to 9.62 MMbpd, the highest seven-day figure since federal officials began tracking weekly data in 1983.

Oil steadied in NY before weekly data on crude inventories in the US, the world's biggest oil consumer.

At the same time, Kilduff said, product components were bullish as gasoline and distillate fuel inventories remained in the lower half of the normal range.

Gareth Southgate: Ruben Loftus-Cheek is capable of anything
I certainly learned a lot in this game. 'I had Gareth for almost three years in the Under-21s so it wasn't too much of a new thing coming here.

Conor McGregor storms ring, shoves ref in Dublin MMA match
The UFC star was involved in a insane altercation in the cage with referee Marc Goddard at the event in the 3Arena. McGregor helped him climb over and the two celebrated the win in front of the cheering crowd.

Melania Trump visits Beijing Zoo
Meanwhile, the first lady plans to return to Washington after stopping in Alaska to visit military troops. She also stopped to sign a poster with her name and the message, "Thank you to the Beijing Zoo!"

"Stronger oil fundamentals and investor inflows have been the catalyst for higher oil prices, but adding further support now is a focus on several geopolitical risks that have been looming over oil markets for a while", said analysts at Citi.

"At the end of the day, with the rise in USA production and build [at the Cushing, Okla., trading hub], we. wouldn't be surprised to see a further pullback in the days to come" barring any new geopolitical news out of Saudi Arabia, said Zahir.

Refinery crude runs rose 290,000 bpd as utilization rates increased 1.5 percentage points to 89.6 percent of total refining capacity, EIA data showed. While this almost perfectly offset the previous week's drawdown, the unexpected rise also defeated analysts' expectations for a 2.9m barrel decrease. The S&P Global Platts survey forecast supply declines of 2.25 million barrels for gasoline and 1.85 million barrels for distillates.

Traders said they were also watching escalating tensions in the Middle East, especially between regional rivals Saudi Arabia and Iran.

"There's something for both bulls and bears in this week's inventory report, with a bearish build to crude stocks versus consensus, and bullish chunky draws for both gasoline and distillates", said Matt Smith, director of commodity research at ClipperData.

Crude oil stockpiles recovered last week as very large drops in product stockpiles were offset by a collapse in net imports.

Other reports by GizPress

Discuss This Article