Crude Oil Prices Gain In Asia As China Trade Data Supports

Marco Green
October 13, 2017

However, the EIA also reported a 2.5-million-barrel rise in gasoline inventories for last week, exceeding analyst expectations of a 1.4-million-barrel increase, and in contrast to API estimates of a 1.575-million-barrel draw.

At the time of writing, WTI was trading at US$50.32 a barrel and Brent crude was at US$56.17 a barrel.

WTI light sweet crude oil fell 70 cents, or 1.4%, to settle at $50.60/bbl.

Crude oil futures slipped Thursday, put pared early losses after the government said USA oil inventories dropped last week. Distillate stocks fell by 1.5 million barrels, short of expectations for a drop of 2.2 million barrels.

The agency forecast that 2018 crude oil output will rise by 680,000 barrels per day (bpd) to 9.92 million bpd.

Traders are saying the one of the IEA report was bearish because it suggested that demand for OPEC crude next year would not be sufficient to absorb all the available supplies. The rebound in U.S. oil production this year, reversing an annual decline of around 550,000 b/d recorded in 2016 - the first drop after seven successive years of growth - has been a major factor eroding the impact of the 1.72 million b/d of production cuts pledged by 22 OPEC and non-OPEC producers in a bid to rebalance the market starting January, and now in effect until March 2018.

In May, Opec and non-Opec members agreed to extend production cuts of 1.8m barrels per day for a period of nine months until March 2018 but rising production from the U.S., Nigeria and Libya has undermined the oil cartel's efforts to curb excess supply.

A deal led by the Organization of the Petroleum Exporting Countries helped lift oil prices from the $30.00 to $40.00 per barrel range in late 2016 and early 2017.

USA commercial crude oil inventories decreased by 2.8 million barrels from the previous week, the EIA said.

A US federal holiday on Monday delayed the release of weekly inventory numbers by a day. Analysts had forecast a draw of 400,000 barrels.

"Taking 2018 as a whole, oil demand and non-Opec production will grow by roughly the same volume and it is this current outlook that might act as the ceiling for aspirations of higher oil prices", the agency said.

Other reports by Click Lancashire

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