Gold Silver Reports – Crude Oil Dips as Industry Data Shows U.S Crude — Crude edged lower after an industry report was said to show U.S. crude and gasoline inventories are continuing to expand.
Crude Oil Dips as Industry Data
Futures in New York lost ground after the American Petroleum Institute was said to have reported nationwide crude stockpiles rose by 3.95 million barrels last week, while gasoline supplies expanded by 4.63 million barrels. A fuel build of that magnitude would be the largest since late December if it’s confirmed by the Energy Information Administration on Wednesday.
“It’s clearly bearish news. The combination is a bit of a surprise,” said James Williams, president of London, Arkansas-based energy researcher WTRG Economics, in a telephone interview. “When you add to it last week’s 26 oil rig count increase, it continues the bearish sentiment.”
Earlier in the day, the International Energy Agency said crude inventories in the world’s strongest economies dwindled by the most in six years in December, even as American shale drillers pumped more oil on to world markets.
The Organization of Petroleum Exporting Countries posted record compliance with self-imposed production limits last month amid aggressive drilling by American shale explorers. In a report released on Tuesday, the Paris-based IEA said the surplus is being cleared by higher consumption, boosting its forecast for global demand growth this year by about 100,000 barrels a day to 1.4 million a day.
“Demand remains very healthy,” Paul Crovo, a Philadelphia-based analyst at PNC Capital Advisors LLC, said by telephone. “The inventory surplus has been largely wiped out and we’re at a point where even if the U.S. supply numbers do come through, they are going to be needed” to slake demand.
Meanwhile, Iraqi Oil Minister Jabbar al-Luaibi said Tuesday that the cartel will discuss in December whether to extend their supply accord into a third year and there has been no talks about ending the cuts.
U.S. Stockpiles
West Texas Intermediate crude for March delivery traded at $58.90 after settling at $59.19 a barrel on the New York Mercantile Exchange.
Brent for April settlement rose 13 cents to end the session at $62.72 on the London-based ICE Futures Europe exchange. The global benchmark traded at a $3.69 premium to April WTI.
The API also reported Cushing supplies fell by 2.32 million barrels, while distillate stockpiles rose by 1.1 million barrels.
In the U.S., crude stockpiles probably climbed by 3.1 million barrels last week, according to a Bloomberg survey. In Cushing, Oklahoma, home to the biggest American pipeline hub, crude inventories probably decreased by 1.7 million barrels last week. – Goldman Neal Bhai Reports
