Thursday, 01 October, 2020

Oil Prices Slip as Inventories Build

Oil prices gain U.S. crude little changed after inventory data An oil pump is seen at sunset outside Vaudoy-en-BrieMore
Ginger Lawrence | 18 July, 2019, 10:26

Brent crude futures were down 82 cents at $63.53 a barrel and U.S West Texas Intermediate (WTI) crude futures fell 99 cents $56.63 a barrel.

Oil futures fell on Wednesday, extending a more than 3% drop in prices the previous session, after US government data showed large builds in refined product stockpiles.

Oil prices rose on Wednesday after steep losses in the previous session, as Barry weakened to a tropical depression and U.S. Secretary of State Mike Pompeo said Iran was prepared to negotiate about its missile program.

Barry, which came ashore on Saturday in central Louisiana as a Category 1 hurricane, prompted oil companies to shut almost 74 percent of production at U.S. Gulf of Mexico platforms ahead of the storm, the U.S. offshore drilling regulator said.

The Energy Information Administration reported a modest oil inventory draw of 3.1 million barrels for the week to July 12, confirming and even exceeding the American Petroleum Institute's Tuesday estimate of a small 1.401-million-barrel draw.

Oil prices have fallen this week as worries over a Middle East conflict have eased, oil production in the Gulf of Mexico has resumed after a storm and worries have emerged over Chinese economic growth.

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Futures declined as much as 0.8% in NY after the Energy Information Administration found stocks of gasoline and distillate fuels grew by a combined 9.25 million gallons, well above analyst estimates.

The US drilling regulator said 1.1 million barrels per day of oil, or 58 per cent of the region's total, remained shut.

Crude production was disrupted last week by Storm Barry, which came ashore on Saturday in central Louisiana as a Category 1 hurricane, the first major storm to hit the U.S. Gulf of Mexico this season.

The dispute between the United States and Iran over Tehran's nuclear program have lent support to oil futures, given the potential for a price spike should the situation deteriorate.

Distillate fuels stockpiles, which include diesel and heating oil, rose by 6.2 million barrels, compared with expectations for a 613,000-barrel gain, the API data showed.

Official data is due out later on Wednesday from the USA government's Energy Information Administration (EIA).