US Crude Oil Inventories Post Surprise Gain Last Week
- Author: Zachary Reyes Jun 09, 2017,
Jun 09, 2017, 22:34
Traders, however, have focused on petroleum products like gasoline, rather than crude oil, to gauge market conditions - and API reported gasoline stocks increased by 4.1 million barrels.
United States stockpiles grew by 3.3 million barrels in the week ending June 2, while the market had expected a 3.5 million barrels decline, the Energy Information Administration said.
The Organization of the Petroleum Exporting Countries has pledged to cut nearly 1.8 million barrels per day (bpd) to help reduce global inventories to their five-year average.
The price for Brent crude oil was down 1 percent about 15 minutes before the start of trading in NY to $49.64 per barrel.
U.S. crude futures settled down five per cent, or US$2.47 a barrel, at US$45.72 a barrel, the lowest settlement for United States crude since May 4.
U.S. crude oil inventories rose unexpectedly last week amid lower refinery runs and exports.
May production rose despite very high compliance from both Saudi Arabia and Angola, as Iraqi output also rose steeply.
On the New York Mercantile Exchange crude futures for June delivery rose 0.26% to 45.84 a barrel, while on London's Intercontinental Exchange, Brent gained 0.33% at $48.22 a barrel.
The EIA data also showed an increase in imports and a drop in exports. According to Citigroup, deep-water output could expand by more than one million barrels per day by 2022.
Earlier that same month, Saudi Aramco said it would cut crude supplies to China, South Korea, and South East Asia by 1 million barrels each.
Brent crude rose 31 cents to $48.37 per barrel, while the US West Texas Intermediate increased the same to $46.03 per barrel.
In December 2016, OPEC and non-OPEC producers reached their first deal since 2001 to curtail oil output jointly and ease a global glut after more than two years of low prices.
The concern is that that spat will lead the OPEC members to disregard their production-cutting agreement. Part of the reason is a drop in refinery runs and the reclassification of some supply released again from the Strategic Petroleum Reserve. Exports dropped to 557K bpd from the previous week's 1.3M bpd, whereas crude imports advanced 1.1M bpd.