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Oil edges lower; U.S. crude supply data seen as bearish

Reuters  |  NEW YORK 

By David Gaffen

NEW YORK (Reuters) - edged lower on Wednesday, after U.S. data showed a smaller-than-expected decline in overall crude inventories coupled with another rise in production, hindering OPEC's efforts to reduce a surplus of crude.

U.S. crude stocks fell 1 million barrels on the week, according to the U.S. Energy Information Administration, a bit less than anticipated. A surprise build in gasoline inventories despite heavier refining activity, along with an increase in U.S. crude production, pushed prices lower.

Gasoline stocks posted a counter-seasonal build of 1.5 million barrels.

Brent crude futures dipped 18 cents at $54.71 a barrel as of 11:16 a.m. EDT (1516 GMT), while U.S. crude futures lost 19 cents to $52.22 a barrel.

"Rising output in the U.S. remains the predominant bearish factor for prices despite growing anticipation that OPEC will extend a self-imposed cap on its production in the upcoming May meeting," said Abhishek Kumar, senior energy analyst at Interfax Energy's Gas Analytics in London.

If the losses hold, it would extend crude's decline to three straight days. The market received a modicum of support from comments on Wednesday by Mohammed Barkindo, secretary-general of the Organization of the Petroleum Exporting Countries, that the group was committed to cutting inventories.

OPEC has had a hard time reducing a crude glut, as supply remains high in parts of the world, particularly the United States, where inventories were at 532.3 million barrels, only about 3 million less than the record reached in March.

"It seems that the optimism in the market we have seen since the last few days of March is running out of steam," wrote Tamas Varga, PVM Associates analyst, noting the "ever-increasing rise" in U.S. shale output.

OPEC and other producers such as Russia agreed to cut output by almost 1.8 million barrels per day in the first half of 2017 to drain a supply overhang that has persisted for nearly three years.

U.S. stockpiles and production have cast doubt on whether the cuts were enough. U.S. production rose to 9.252 million barrels a day in the most recent week, highest since August 2015.

Geopolitical concerns have helped underpin This week, U.S. President Donald Trump ordered a review of whether the lifting of sanctions against Iran was in the United States' national interests. A lifting of certain sanctions against Iran in late 2015 allowed Tehran to more than double its crude exports over 2016.

(Additional reporting by Henning Gloystein in Singapore and Libby George, Amanda Cooper and Alex Lawler in London; Editing by Dale Hudson and David Gregorio)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

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Oil edges lower; U.S. crude supply data seen as bearish

NEW YORK (Reuters) - Oil edged lower on Wednesday, after U.S. data showed a smaller-than-expected decline in overall crude inventories coupled with another rise in production, hindering OPEC's efforts to reduce a global surplus of crude.

By David Gaffen

NEW YORK (Reuters) - edged lower on Wednesday, after U.S. data showed a smaller-than-expected decline in overall crude inventories coupled with another rise in production, hindering OPEC's efforts to reduce a surplus of crude.

U.S. crude stocks fell 1 million barrels on the week, according to the U.S. Energy Information Administration, a bit less than anticipated. A surprise build in gasoline inventories despite heavier refining activity, along with an increase in U.S. crude production, pushed prices lower.

Gasoline stocks posted a counter-seasonal build of 1.5 million barrels.

Brent crude futures dipped 18 cents at $54.71 a barrel as of 11:16 a.m. EDT (1516 GMT), while U.S. crude futures lost 19 cents to $52.22 a barrel.

"Rising output in the U.S. remains the predominant bearish factor for prices despite growing anticipation that OPEC will extend a self-imposed cap on its production in the upcoming May meeting," said Abhishek Kumar, senior energy analyst at Interfax Energy's Gas Analytics in London.

If the losses hold, it would extend crude's decline to three straight days. The market received a modicum of support from comments on Wednesday by Mohammed Barkindo, secretary-general of the Organization of the Petroleum Exporting Countries, that the group was committed to cutting inventories.

OPEC has had a hard time reducing a crude glut, as supply remains high in parts of the world, particularly the United States, where inventories were at 532.3 million barrels, only about 3 million less than the record reached in March.

"It seems that the optimism in the market we have seen since the last few days of March is running out of steam," wrote Tamas Varga, PVM Associates analyst, noting the "ever-increasing rise" in U.S. shale output.

OPEC and other producers such as Russia agreed to cut output by almost 1.8 million barrels per day in the first half of 2017 to drain a supply overhang that has persisted for nearly three years.

U.S. stockpiles and production have cast doubt on whether the cuts were enough. U.S. production rose to 9.252 million barrels a day in the most recent week, highest since August 2015.

Geopolitical concerns have helped underpin This week, U.S. President Donald Trump ordered a review of whether the lifting of sanctions against Iran was in the United States' national interests. A lifting of certain sanctions against Iran in late 2015 allowed Tehran to more than double its crude exports over 2016.

(Additional reporting by Henning Gloystein in Singapore and Libby George, Amanda Cooper and Alex Lawler in London; Editing by Dale Hudson and David Gregorio)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

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Business Standard
177 22

Oil edges lower; U.S. crude supply data seen as bearish

By David Gaffen

NEW YORK (Reuters) - edged lower on Wednesday, after U.S. data showed a smaller-than-expected decline in overall crude inventories coupled with another rise in production, hindering OPEC's efforts to reduce a surplus of crude.

U.S. crude stocks fell 1 million barrels on the week, according to the U.S. Energy Information Administration, a bit less than anticipated. A surprise build in gasoline inventories despite heavier refining activity, along with an increase in U.S. crude production, pushed prices lower.

Gasoline stocks posted a counter-seasonal build of 1.5 million barrels.

Brent crude futures dipped 18 cents at $54.71 a barrel as of 11:16 a.m. EDT (1516 GMT), while U.S. crude futures lost 19 cents to $52.22 a barrel.

"Rising output in the U.S. remains the predominant bearish factor for prices despite growing anticipation that OPEC will extend a self-imposed cap on its production in the upcoming May meeting," said Abhishek Kumar, senior energy analyst at Interfax Energy's Gas Analytics in London.

If the losses hold, it would extend crude's decline to three straight days. The market received a modicum of support from comments on Wednesday by Mohammed Barkindo, secretary-general of the Organization of the Petroleum Exporting Countries, that the group was committed to cutting inventories.

OPEC has had a hard time reducing a crude glut, as supply remains high in parts of the world, particularly the United States, where inventories were at 532.3 million barrels, only about 3 million less than the record reached in March.

"It seems that the optimism in the market we have seen since the last few days of March is running out of steam," wrote Tamas Varga, PVM Associates analyst, noting the "ever-increasing rise" in U.S. shale output.

OPEC and other producers such as Russia agreed to cut output by almost 1.8 million barrels per day in the first half of 2017 to drain a supply overhang that has persisted for nearly three years.

U.S. stockpiles and production have cast doubt on whether the cuts were enough. U.S. production rose to 9.252 million barrels a day in the most recent week, highest since August 2015.

Geopolitical concerns have helped underpin This week, U.S. President Donald Trump ordered a review of whether the lifting of sanctions against Iran was in the United States' national interests. A lifting of certain sanctions against Iran in late 2015 allowed Tehran to more than double its crude exports over 2016.

(Additional reporting by Henning Gloystein in Singapore and Libby George, Amanda Cooper and Alex Lawler in London; Editing by Dale Hudson and David Gregorio)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

image
Business Standard
177 22