Oil ticks up as rising crude stocks offset by product demand

Cornelia Mascio
Ottobre 20, 2019

Brent crude was trading down on the day as well, by $0.33 (-0.55%) at $59.58, or a $0.50 decrease from last week.

U.S. West Texas Intermediate (WTI) crude CLc1 futures edged up by 58 cents to $54.51.

In the third quarter, China's economic growth slowed to 6% year on year, its weakest for 27-1/2 years and below expectations, dogged by soft factory production amid sluggish domestic demand and continuing trade tensions with the United States.

US crude oil futures were down 48 cents, or 0.9%, at $52.88 after earlier dropping more than 1% to a session low of $52.76 earlier.

WTI was trading down 0.82% shortly after data release, while Brent was trading down 1.24%.

China's September refinery throughput, however, rose 9.4% year on year, a signal that petroleum demand from the world's biggest oil importer remained robust despite economic headwinds. "Chinese trade negotiations", Jim Ritterbusch, president of Ritterbusch and Associates, said in a report. Oil and gas rigs in Canada are down 48 year-on-year.

"Oil prices are facing headwinds from the unexpectedly marked 10.5 million barrel increase in U.S. crude oil stocks last week, as reported by the API after close of trading yesterday evening", said Carsten Fritsch, an analyst at Commerzbank AG in Frankfurt. "The country was a net exporter for crude and refined products for a second consecutive week for the first time on record". Companies added one oil rig in the week to October 18, bringing the total count to 713, General Electric Co's (GE.N) Baker Hughes energy services firm said on Friday.

"Inventories have built by a whopping 9.3 million barrels, led by the refinery utilization rate dropping to its lowest since Hurricane Harvey in September 2017", said Matt Smith, director of commodity research at ClipperData in Louisville, Kentucky. The contract is down 83 cents since October 11 and is on course for its third weekly drop in four.

Elsewhere, the joint technical committee monitoring a global deal to cut output between the Organization of the Petroleum Exporting Countries (OPEC) and partners, including Russian Federation, found compliance with cuts for September stood at 236%, according to four OPEC sources.

Over the past four weeks, crude oil imports averaged about 6.30 million b/d, down by 1.40 million b/d year-on-year, while crude oil exports averaged about 3.13 million b/d, up by about 945,000 b/d year-on-year.

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