Oil prices mixed in choppy trade, rising U.S. production weighs

Cornelia Mascio
Aprile 21, 2017

Oil slid more than 1 percent on Wednesday, after USA data showed a counter-seasonal build in gasoline inventories and a smaller-than-expected decline in overall crude stocks coupled with another rise in domestic crude production. John Saucer, vice president of research and analytics at Mobius Risk Group in Houston, said the market was not jittery, pointing to relatively subdued fixed-price activity and stable options premiums. WTI tumbled 4% on Wednesday following a smaller than expected drawdown in oil inventories and the first jump in gasoline supplies in several months.

Last week the prices of oil had gone past $53 a barrel following the push by some producers to extend the OPEC supply cut deal by the more than 6 months that had been settled on.

U.S. crude stocks fell 1 million barrels in the latest week, according to the U.S. Energy Information Administration, a bit less than anticipated.

Brent crude futures LCOc1 fell 85 cents, or 1.6 percent, to $54.04 a barrel as of 12:31 p.m. EDT, while US crude futures CLc1 lost 77 cents, or 1.4 percent, to $51.64 a barrel.

Iran was allowed to increase its output under the deal as the nation rebuilds from global sanctions that pressured its energy industry.

US gasoline stocks posted a counter-seasonal build of 1.5 million barrels, despite heavier refining activity.

Saudi oil production in February was 10.011 million bpd, and that's the same figure the Saudis had reported to OPEC for their production that month.

The energy component trades up just 0.16% at $50.93 a barrel after gaining about 1% early on Thursday. 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 US production and imports from OPEC nations, pressured prices.

"At 532.3 million barrels, United States crude oil inventories are near the upper limit of the average range for this time of year". Distillate stocks reached their lowest levels since November 2015, the EIA said.

"Barring a spike in geopolitical tensions.oil prices will simply not be able to materially rally through resistance in the mid $50s (WTI) until the pace of of US production moderates", said Tyler Richey, co-editor of the Sevens Report.

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