By August 16, 2017 Read More →

Oil prices fall despite drop in US crude stocks

crude stocks

Oil prices dropped on Wednesday, despite a significant reduction in US crude stocks. Reuters file photo by Nick Oxford.

Largest draw in crude stocks in nearly a year

Oil prices fell in seesaw trading on Wednesday, despite a larger-than-expected drop in US crude stocks reported by the US Energy Information Administration.

Brent crude was down by 13 cents to $50.67/barrel by 1:14 p.m. EDT after trading as high as $51.40 earlier in the day and US WTI fell by 28 cents to $47.27/barrel.

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According to weekly data released by the EIA, oil stockpiles fell by 8.95 million barrels in the week ending Aug. 11 and now sit at the lowest level since January 2016.  Analysts had anticipated a drop of 3.1 million barrels.

At the Cushing, Oklahoma oil delivery hub, crude stockpiles rose by 678,000 barrels.

The EIA reported US refinery crude runs fell by 9,000 barrels per day (b/d), and utilization rates were down by 0.2 per cent from 12 year highs in the week previous.

Gasoline stocks were unchanged, against analysts’ expectations of a drop of 1.1 million barrels.

Analysts compared the bearish production data against the bullish stockpile draw.

Gene McGillian, director of market research at Tradition Energy told Reuters”I would describe this as a bullish report and probably the effect would be we’re going to keep ourselves pinned here waiting for the next signal.”

“If we see these draws past Labor Day, it will drive the market, possibly past $50.”

LNG

 

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