Published: Sun, February 26, 2017
Economy | By Melissa Porter

Oil prices fall as U.S. crude inventories rise further

Oil prices fall as U.S. crude inventories rise further

Producers and traders shipped out 1.21 million barrels of crude a day from the the week that ended February 17, the most in Energy Information Administration data going back to 1993. USA light crude settled up 86 cents, or 1.6%, at $54.45 US a barrel after touching $54.94 a barrel.

Benchmark Brent crude oil rose 71 cents a barrel, or 1.3%, to $56.55 mid-afternoon Thursday after touching a high of $57.26.

The fall in USA refinery demand and the rise in U.S. crude oil production between February 10 and February 17, 2017, likely led to the rise in inventories. I am watching for a spike higher as that would likely be a long-term validation that the trend will continue, and we should keep our focus higher. "As output moves from 9 million barrels a day to 9.3 million or 9.4 million, three-quarters of that increased output will be for export".

NEW YORK, Feb 24 (Reuters) - Oil prices fell about 1 percent on Friday as worries about rising USA supplies outweighed OPEC pledges to boost compliance with output curbs.

The oil market remains concerned about rising US oil production increasing the global supply problem, despite cutbacks by a consortium of OPEC and non-OPEC producers to take 1.8 million b/d of supply off the market in the first half of 2017. "It's a battle between how quick Opec can cut without shale catching up", Nunan said, referring to United States drilling in shale formations that has shown an upsurge this year. A fall in exports could have also contributed to the rise in inventories.

"Current oil prices are neither sustainable for OPEC or the industry", AB Bernstein said in a note.

"The oil market remains focused on the global rebalancing act, with attention centered on OPEC compliance and US production growth", said Michael Tran, director of energy strategy at RBC Capital Markets in NY. East Coast refinery utilization rates dropped to 72.4 percent, the lowest seasonal level since 2015, the EIA said. Another 4.1 million barrels have been drawn down from storage tankers offshore Singapore, and additional 1.2 million barrels have been sold out of tankers anchored off Indonesia, according to Reuters data.

The oil for delivery in far-month April also fell Rs 62 or 1.68 per cent to Rs 3,635 per barrel in 3,026 lots.

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