United States crude oil stocks drop

Owen Stevens
April 21, 2017

Traders said that the gains came on the back of a reduction in commercial U.S. crude stocks, which fell by 1 million barrels last week to 532.34 million barrels, according to the U.S. Energy Information Administration (EIA). Stocks have dropped sharply in the last several weeks and have fallen below levels seen at this time a year ago, but are still higher than where inventories have been in this decade. The report showed that Saudi Arabia's crude exports declined from 7.7 million barrels per day in January to 6.96 barrels per day in February.

Crude futures were trading more than 30 cents higher in Asia early Thursday, but the recovery, against a rout of almost $2/barrel at the previous day's close, was more likely bargain-hunting than the start of a full correction, as the weekly counter-seasonal build in USA gasoline inventories continued to weigh on market sentiment.

Oil prices jumped by more than 10 per cent following the deal with worldwide benchmark Brent crude now trading above $55 per barrel.

The price of crude oil fell following the release of an industry report which showed that the decrease in inventory in the United States was lower than had been anticipated.

At the same time, EIA estimates that USA crude oil refinery inputs averaged over 16.9 million barrels per day during the week ending April 14, or 241,000 barrels per day more than the previous week's average.

"They drop production, we add production, and so at end of the day it's ugly", said Robert Yawger, energy futures strategist at Mizuho Americas.U.S. production rose to 9.252 million barrels a day in the latest week, highest since August 2015.

Gasoline futures recently gained 0.6% to $1.6684 a gallon and diesel futures gained 0.2% to $1.584 8 a gallon.

"Saudi's done a good job of managing the rhetoric", said Michael Hiley, a trader at LPS Futures LLC. Weekly imports from OPEC nations rose by 900,000 barrels, the EIA 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. Off-topic, inappropriate or insulting comments will be removed.

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