Oil prices fall on higher OPEC output, rise in US crude stocks

  • by Dan Gutierrez
  • in Markets
  • — Oct 14, 2016
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Brent crude was down 66 cents, or 1.3 percent, at $51.15 per barrel by 11:09 a.m. EDT (1609 GMT). West Texas Intermediate (WTI) crude rose 10 cents to $50.28.

In the agency October report, "while the new strategy could help erode the massive oil inventory overhang, there could be another surge in American output if prices rise to $60 a barrel". The EIA reported a drop of 3.7 million barrels for distillates, which include diesel and heating oil, and 1.9 million barrels decline for gasoline.Analysts had expected distillates to draw by just 1.6 million barrels and gasoline to decline by 1.5 million."There is a lot of seasonality in this data", Scott Shelton, energy futures broker at ICAP in Durham, North Carolina, said, adding that crude builds were common this time of year as USA refineries headed into maintenance.

The reports came out one day later than usual due to Monday's Columbus Day holiday.

Oil prices fell on Thursday after OPEC said its production had risen to the highest level in at least eight years and following reports of an increase in US crude stockpiles. On the other hand, global oil supply rose by 0.6 million barrels per day to 97.2 million barrels per day last month.

Oil supplies at the Cushing, Oklahoma, facility saw a 1.35 million-barrel dive, as opposed to the 100,000-barrel build that analysts anticipated.

Experts had expected a large build of 2 million in crude oil for this week-but 2.7 million exceeded even this pessimistic figure, and the already unsteady markets appear rattled.

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Oil prices edged up on Wednesday, supported by record Indian crude imports and talks between OPEC producers and other oil exporters on curbing output to end a glut in the global market.

And in a further sign of a well-supplied market, Middle East crudes from the United Arab Emirates and Qatar last month traded in the spot market at discounts of as much as 25 cents a barrel to their official selling prices.

But, while the focus is on OPEC's proposed cut, with Russian Federation possibly joining, others warn output is creeping up elsewhere. The global benchmark closed at a $1.18 premium to December WTI.

The scale of the internal obstacles OPEC must resolve was revealed Wednesday as the group's latest output estimates showed a half-million-barrel difference of opinion over how much two key members are pumping.

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