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Oil prices turn positive as US crude stockpiles fall by 3.6 million barrels, more than expected

CNBC

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Rusted out ‘pump-jacks’ in the oil town of Luling, Texas.

Oil prices edged higher on Wednesday after government data showed U.S. crude inventories fell more than expected after an industry report had indicated a surprise build in fuel stocks.

U.S. commercial crude inventories fell by 3.6 million barrels to a total of 528.7 million barrels in the week through April 21, the Energy Information Administration said. The decline came as refineries hiked output and despite a 515,000 barrels-per-day rise in net U.S. crude imports.

U.S. inventory data issued late on Tuesday by the American Petroleum Institute (API) showed crude stockpiles rose 897,000 barrels, defying expectations of a fall of 1.7 million barrels.

U.S. West Texas Intermediate (WTI) was trading up 22 cents at $49.78 per barrel by 10:38 a.m. ET (1438 GMT), after gaining 0.7 percent in the previous session.

North Sea Brent crude, the international benchmark for oil prices, pared losses to trade down 2 cents at $52.08 per barrel. Brent is about 7 percent below its April peak.

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The line in the sand for crude: Trader

The line in the sand for crude: Trader   

Offsetting the headline crude stockpile data was a rise in fuel inventories, unusual for this time of the year.

Gasoline stocks rose by 3.4 million barrels, compared with analysts’ expectations in a Reuters poll for a 1 million-barrel drop. Distillate stockpiles, which include diesel and heating oil, rose by 2.7 million barrels, versus expectations for a 1 million-barrel drop, the EIA data showed.

U.S. gasoline futures were down 0.7 percent on Wednesday, paring earlier losses and turning positive year to date.

Analysts say lackluster gasoline demand could leave stockpiles of the fuel elevated even through the summer driving season, when consumption surges. That would potentially hurt demand for feedstock crude oil.

Brent and WTI also found support from Saudi Energy Minister Khalid al-Falih, who said he was interested in talks between the Organization of the Petroleum Exporting Countries and non-OPEC producers to stabilize oil prices.

Man who called oil price collapse now sees this

Man who called oil price collapse now sees this   

OPEC and a handful of big producers, including Russia, pledged to cut output by 1.8 million barrels per day (bpd) in the first half of 2017. Gulf and some other producers have indicated cuts could be extended to the end of 2017. An extension will be discussed when OPEC meets in May.

“The market remains heavy with doubts about OPEC’s ability to achieve a successful extension of the current deal with Russia adopting a lukewarm ‘wait and see’ approach,” said Ole Hansen, head of commodity strategy at Saxo Bank.

The average value of the Brent crude forward curve has fallen by over $5 per barrel since the start of the year, when the OPEC-led supply cut started.

The slump in Brent is a result of record crude oil volumes in circulation on ships around the world. Thomson Reuters Eikon shipping data showed 50 million barrels per day were booked for shipment on tankers this month, up 10 percent since December.

— CNBC’s Tom DiChristopher contributed to this report.

Oil prices rise on Venezuela protests, strong Asian demand

Reuters

Demonstrators clash with members of Venezuelan National Guard during a rally demanding a referendum to remove Venezuela’s President Nicolas Maduro, in San Cristobal, Venezuela October 26, 2016. REUTERS/Carlos Eduardo Ramirez
By Henning Gloystein | SINGAPORE

SINGAPORE Oil prices rose on Thursday, lifted by concerns over Venezuela’s stability as well as by firm demand in Asia, although doubts over OPEC’s ability to organize a coordinated production cut still weighed on markets.

International Brent crude oil futures LCOc1 were trading at $50.18 per barrel at 0655 GMT (2:55 a.m. ET) on Thursday, up 20 cents, or 0.4 percent, from their last close.

WTI futures CLc1 were at $49.33 per barrel, up 15 cents, or 0.31 percent, from their previous settlement.

Traders said concerns over political stability in Venezuela, a major oil producer, had lifted markets.

In Asia, South Korea’s S-Oil Corp (010950.KS) said on Thursday that it expected refinery demand to rise in the region.

As crude is the main feedstock for oil refineries, strong refining activity tends to be price supportive of crude.

In the United States, WTI futures received support from a 553,000-barrel draw in crude inventories to 468.16 million barrels. [EIA/S]

But some analysts said that the drop in stocks was misleading.

“The decline of 553,000 barrels last week was centered on the west coast, which is isolated from the rest of the network. Inventories actually increased along the East and Gulf Coasts,” ANZ bank said on Thursday.

Traders also said that oil prices were being held back on doubts that the Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC producers like Russia will be able to effectively coordinate curbs in output to prop up prices.

“Investors remain uncertain as to whether OPEC can implement the tentative agreement to cut production,” ANZ bank said.

A cut is being pushed by Saudi Arabia, OPEC’s biggest producer, and it is being supported – at least by word – by Russia, not a member of the cartel but the world’s biggest oil producer.

However, OPEC’s No.2 producer, Iraq, has said it would not cut output, arguing it needs the revenue to fight Islamic State, and the government is trying to lure investors to boost output further from its current record 4.43 million barrels per day.

(Reporting by Henning Gloystein; Editing by Richard Pullin and Gopakumar Warrier)