USA supply levels drag on oil prices
- Author: Zachary Reyes Feb 12, 2017,
Feb 12, 2017, 8:23
Crude supplies rose by 14.2 million barrels last week, the American Petroleum Institute was said to report Tuesday.
Brent for April settlement dropped 12 cents to $54.93 a barrel on the London-based ICE Futures Europe exchange.
Light, sweet crude for March delivery settled up 17 cents, or 0.3%, to $52.34 a barrel on the New York Mercantile Exchange, after trading as low as $51.50 a barrel earlier in the session.
US crude oil imports averaged about 9.4 million barrels per day last week, a 1.1 million barrels per day gain from the previous week.
US crude inventories surged by almost 14 million barrels last week on higher oil imports.
The movement upwards can be considered to be somewhat at odds with additional data that yesterday came from another weekly assessment of U.S. inventories, this one provided by the U.S. Energy Information Administration, the IEA.
The API reported a 2.903-million-barrel build in gasoline inventories, and a 1.373-million-barrel build to distillates.
USA oil drillers boosted the rig count by 17 to 583 last week, the most since October 2015, according to Baker Hughes Inc.
With U.S. crude production rising just as the Organization of Petroleum Exporting Countries and other nations including Russian Federation cut output as part of a December pact, American exports will probably increase as its cheaper oil turns more attractive overseas, according to Goldman.
Investors said that crude had found support in the unexpected rally in US gasoline inventories, despite most of the fuel markets remained bloated, suggesting the likelihood of a further price increase. OPEC and Russian Federation have together cut at least 1.1 million bpd so far. "They are an indication of stronger USA demand".
Still, analysts said the gasoline market remained oversupplied.
Chinese oil demand grew in 2016 at the slowest pace in at least three years, Reuters calculations showed, the latest sign of slower demand from the world's largest energy consumer.
Market observers are growing more bearish than the previous months when prices were supported by production cuts from the Organization of the Petroleum Exporting Countries and several countries outside the cartel.