Oil prices rise on tightening inventories

24 August, 2017, 01:38 | Author: Darnell Patrick
  • OPEC oil supply set for sharp drop in August: PetroLogistics

Oil in NY has fluctuated below $50 a barrel as investors weigh rising global output against supply cuts by the Organization of Petroleum Exporting Countries and its allies that are taking longer than expected to drain a glut.

US commercial crude inventories have fallen by nearly 13 percent from their March peaks, to 466.5 million barrels.

This roughly translates to an increase of about 0.4-0.5 mbpd from these two and negates almost half of the Opec's 1.2 mbpd cut.

Crude stocks at the Cushing, Oklahoma, delivery hub fell 503,000 barrels, the Energy Information Administration said.

Today is the September expiration and we are bouncing off support as we look to the heart of the shoulder season when gasoline demand dips and refineries go into maintenance.

Meanwhile, with $0.31 rise from its previous week, Organization of Petroleum Exporting Countries (OPEC)'s basket price stood at $50.22 per barrel in the mentioned week. Libya and Nigeria are two members exempt from the agreement because of national security concerns and any changes in their output can have day-to-day impacts on the price of oil.

"We are now seeing the impact of those cuts (in the first half of the year) as United States oil inventories fall by more than expected", he said.


U.S. West Texas Intermediate crude futures CLc1 traded at $48.50 a barrel, down 1 cent. Total volume traded was about 13 percent above the 100-day average.

Futures in NY added 0.8 percent after slumping 2.4 percent Monday.

The Bloomberg Dollar Spot Index fell as much as 0.3%.

US crude oil stocks last week fell for an eighth consecutive week to their lowest since January 2016, while gasoline stocks declined more than anticipated, the Energy Information Administration said on Wednesday. Gasoline inventories also dropped by 1.22m barrels, which beat traders' expectations. Still, U.S. demand for gasoline, which usually peaks in summer, strengthened in early August to a seasonal high. Output from major shale fields is also forecast to climb to a record next month.

"The report was pretty bullish for crude", Tamar Essner, an energy analyst at Nasdaq Inc.in NY, said by telephone.

WTI light sweet crude oil was up 29 cents at $47.65 an ounce. "It's not going lower".

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