Published: Fri, April 21, 2017
Economy | By Annette Adams

United States crude oil stocks drop

United States crude oil stocks drop

Brent crude futures LCOc1 fell 85 cents, or 1.6 percent, to $54.04 a barrel as of 12:31 p.m. EDT, while USA crude futures CLc1 lost 77 cents, or 1.4 percent, to $51.64 a barrel. A surprise build in gasoline inventories pressured gasoline prices, which in turn pressured crude oil (IXC) (IYE) (SCO) (IEZ) prices on April 19, 2017. However, that level was still near a record high.

"The market sentiment appears to be that the increase in USA shale production outweighs the OPEC action and the market is keeping the loss we had yesterday", he said.

The fall in oil prices was, however, given some support by a report indicating that there was a decline in output in Saudi Arabia. The May contract expires at settlement, and the more actively traded June contract recently gained 10 cents, or 0.2%, to $50.95 a barrel.

Patrick Pouyanne, the chief executive of French oil and gas giant Total, said on Thursday prices could fall again by the end of the year due to a rapid increase in USA shale production. Gasoline stocks posted a counter-seasonal build of 1.5 million barrels, despite heavier refining activity.The surprise gasoline build, along with an increase in USA production and imports from OPEC nations, pressured prices.

Global fuel stocks are well above the five-year average, and Saudi Energy Minister Khalid al-Falih was quoted on Thursday as saying inventories remained elevated in part because traders were selling supplies out of tanker storage.

However, any interpretations of an oversupplied market moving towards a balance become questionable if product stocks start rising, especially gasoline, which should now be seeing a seasonal hump in demand.

Oil markets are on path to recovery due to measures taken by Opec and non-Opec members to cut production by 1.8 million barrels per day from January this year, secretary general of Opec said at the third GCC petroleum media forum that kicked off in Abu Dhabi on Wednesday.

"Five of the last trading days we've been lower", he said.

Oil prices wavered between small losses and gains Thursday, buffeted by continued concerns about growing US crude production that were offset by signals that other major producers remain in favor of extending their output-cut agreement into the second half of the year.

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