Crude prices rise on signs of drop in global inventories

Posted September 21, 2017

Crude inventories rose by 4.6 million barrels in the week ending September 15, compared with analyst expectations for an increase of 3.5 million barrels. That's less than half the projected 3.9 million-barrel increase the government is forecast to report Wednesday.

Futures jumped as much as 2.4% in NY.

Oil was up Wednesday ahead of USA production and stockpile data, after Iraq hinted at a possible extension of the current OPEC and non-OPEC production deal. Iraq, the group's second-biggest producer, has said production should be reduced by an additional 1 percent to help rebalance the market.

"Some think that cuts should be extended beyond March, three or four months, or six months, or maybe till the end of 2018", he said at an energy conference in the United Arab Emirates Tuesday.

Crude stocks at the Cushing, Oklahoma, delivery hub rose by 703,000 barrels, EIA said.

Both reports are expected to show a build in US crude inventories as imports resume and refineries were still restarting after a recent shutdown in the Texas Gulf Coast region due to Hurricane Harvey. Total volume traded was about 2% below the 100-day average.

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In parallel, imports rose by 888,000 barrels a day to an average of roughly 7.4m b/d, while refineries operated at 83.2% of capacity.

November WTI Crude Oil settled at settled at $50.28, down $0.07 or -0.14% and December Brent Crude oil closed at $55.15, down $0.10 or -0.18%.

Brent for November settlement advanced $US1.15 to end the session at $US56.29 a barrel on the London-based ICE Futures Europe exchange, the highest level since March. Prices lost 34 cents to $55.14 on Tuesday.

Oil prices also gained support from the latest data released by industry group the American Petroleum Institute that stated a rise of 1.4 million barrels in U.S. crude stocks to 470.3 million against a higher expectation of 3.5 million barrels improvement.

Global crude oil prices slipped slightly Monday but stayed close to multimonth highs as traders braced for a potential stockpile build, expected later this week. That compares with a draw of 2.13 million barrels for gasoline and 1.95 million for distillates, according to the median forecast in a Bloomberg survey.