Oil dips on US exports
LONDON, November 2, 2017 – Oil prices fell for a second-day running on Thursday as a surge in U.S. crude exports offset the data showing supplies of U.S crude oil and gasoline declined more-than-expected.
The U.S. West Texas Intermediate crude December contract lost 16 cents, or 0.29%, to $54.14 a barrel by 4:41AM ET (8:41GMT).
Elsewhere, Brent oil for January delivery on the ICE Futures Exchange in London fell 23 cents, or 0.38%, to $60.26 a barrel.
Data out on Wednesday showed that U.S. oil production grew by 46,000 barrels a day (bpd) to 9.55 million barrels a day, not far off the June. 5, 2015 record high of 9.61 million barrels per day, while weekly U.S. crude oil exports rose to an all-time high of 2.13 million barrels per day.
The ongoing surge in U.S. crude exports comes as the widening spread between WTI crude and Brent oil prices continued to increase international demand for cheaper U.S. crude.
The uptick in production overshadowed a mixed report from the Energy Information Administration (EIA) showing crude and gasoline stockpiles declined more than expected, while distillate fell less-than-expected.
Inventories of U.S. crude fell by roughly 2.4 million barrels in the week ended Oct. 27, a steeper decline than the 1.8 million barrels expected.
Gasoline inventories – one of the products that crude is refined into – fell by 4 million barrels, confounding expectations of a draw of just 2.1 million barrels while supplies of distillates – the class of fuels that includes diesel and heating oil – fell by about 320,000 barrels, undershooting expectations of a decline of 2.1 million barrels.
The dip in oil prices comes amid growing expectations for an extension to the output-cut agreement lifted crude prices to an eighth-month high after the Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC members signaled support for an extension ahead of the upcoming OPEC meeting in November.
In May, OPEC producers agreed to extend production cuts for a period of nine months until March 2018.
OPEC’s Secretary General Mohammad Barkindo noted last week comments from both Saudi Arabian Crown Prince Mohammed bin Salman and Russian President Vladimir Putin that suggested they were in favor of a nine-month extension for the current deal to cut production by 1.8 million barrels a day.
He said that their remarks “clear the fog on the way to (the cartel’s next meeting in) Vienna on November 30.”
Elsewhere on Nymex, gasoline futures for December delivery lost 0.33% at $1.7399 a gallon by 4:45AM ET (8:45GMT), while December heating oil shed 0.59% to $1.8520 a gallon.
Natural gas futures for December delivery traded up 0.59% to $2.914 per million British thermal units.