Oil Falls on Rising U.S. Gas Supplies
By Christopher Alessi
LONDON--Oil prices edged down Wednesday morning, partly in response to rising U.S. product inventories.
Brent crude, the global benchmark, was down 0.62% at $62.47 a barrel on London's Intercontinental Exchange. On the New York Mercantile Exchange, West Texas Intermediate futures were trading down 0.71% at $57.21 a barrel.
Late Tuesday, the American Petroleum Institute, an industry group, released data showing a 9.2 million-barrel rise in gasoline stocks and a 4.3 million-barrel increase in distillate inventories for the week ended Dec. 1, even as crude stocks came down by 5.5 million barrels.
"We were overdue a little bit of profit-taking and the build up in gasoline inventories was the perfect excuse to do just that," said Michael Hewson, chief market analyst at brokerage CMC Markets.
After last week's highly-anticipated meeting between Organization of the Petroleum Exporting Countries and its allies, Mr. Hewson said, crude prices are "probably going to drift a little bit lower" as the market refocuses on the "age-old debate about supply and demand."
OPEC and 10 major producers outside the cartel, including Russia, agreed Thursday to extend a deal to hold down crude output by nearly 2% through the end of next year. An extension was largely priced in by the market and prices have reacted tepidly to the official decision.
The accord was first struck a year ago with the aim of draining the global oil glut and boosting prices. Initially the efforts had little impact, but prices began to rise in the second half of the year amid higher compliance with the production curbs and stronger global demand. Crude prices have risen more than 20% since September.
Oil-market observers will be watching closely Wednesday for official weekly data from the U.S. Energy Information Administration.
"Attention will no doubt be focused not only on inventories but also on U.S. crude oil production," according to analysts at Commerzbank. U.S. output is "likely to have increased further, possibly reaching 9.7 million barrels per day for the time on a weekly data basis," the analysts wrote in a note Wednesday.
Among refined products, Nymex reformulated gasoline blendstock--the benchmark gasoline contract--was down 0.95%, at $1.70 a gallon. ICE gasoil, a benchmark for diesel fuel, changed hands at $554.75 a metric ton, down 0.31% from the previous settlement.
Write to Christopher Alessi at email@example.com
(END) Dow Jones Newswires
December 06, 2017 06:37 ET (11:37 GMT)Copyright (c) 2017 Dow Jones & Company, Inc.