Crude Stockpiles Drop, Oil Prices Fall

Share

Brent crude futures, the global benchmark for oil prices, were down 78 cents, or 1.4%, at $56.16 late morning Thursday.

Oil prices rebounded from earlier losses, although they were still down on the session, after the Energy Department reported a larger-than-expected decline in US inventories and a falloff in weekly production on Thursday.

Crude oil prices fell for the first time in three days as investors mulled over a mixed report from the Energy Information Administration (EIA) showing crude stockpiles fell more than expected while gasoline supplies swelled.

Brent also rose 2 percent the previous day. Platts survey showed analysts expecting a draw of 1.4 million barrels in gasoline and a draw of 1.64 million barrels in distillate stocks.

Meanwhile, traders also focused on oil inventory data.

Demand for Opec oil would be 32.5 million barrels per day in 2018 - around 150,000 bpd lower than the group pumped last month, The International Energy Agency said on Thursday. The lowering of 2017 growth expectations should have been price-supportive, especially for WTI, but with this year nearing an end, attention will shift more to the output expectations for 2018, which at this point are bearish. This likely means OPEC must deepen its production cuts to finish its job of bringing oil stocks back to the five-year average.

The EIA also forecasts USA crude production averaging 9.9M bbl/day in 2018, which would mark the highest annual average production in US history.

Figures released by the Energy Information Administration showed US commercial crude inventories fell by 2.8 million barrels to 462.2 million barrels in the week through October 6.

"Taking 2018 as a whole, oil demand and non-Opec production will grow by roughly the same volume and it is this current outlook that might act as the ceiling for aspirations of higher oil prices", the agency said.

Share