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NYMEX crude flat in Asia, Brent down after mixed API estimates

Published 05/03/2016, 11:32 PM
Updated 05/03/2016, 11:33 PM
© Reuters.  NYMEX flat in Asia, Brent down

© Reuters. NYMEX flat in Asia, Brent down

Investing.com - Crude oil prices turned flat in Asia on Wednesday after U.S. industry supply data noted a build in crude, but refined products showed healthy drawdowns.

On the New York Mercantile Exchange, WTI crude for June delivery traded at $43.65 a barrel, flat. Brent crude eased 0.16% to $44.90 a barrel.

The American Petroleum Institute late Tuesday said its estimate of weekly crude oil stock showed a build of 1.265 million barrels. Distillates stocks dropped 2.6 million barrels in line and gasoline stock fell 1.17 million barrels as the summer driving season nears. More closely-watched data from the U.S. Department of Energy is due later on Wednesday.

On Monday, oil data and market intelligence firm Genscape, Inc. reported a build of 871,000 barrels at the Cushing Oil Hub in Oklahoma. Cushing, the main delivery point of NYMEX oil, is perilously close to reaching full storage capacity.

A number of prominent energy analysts, however, are optimistic that the massive stockpile build will level as Non-OPEC production continues to wane. Last week, the U.S. Energy Information Agency said U.S. production for the week ending on April 22 fell sharply by 15,000 barrels per day to 8.938 million bpd, dropping to fresh 18-month lows. The recent declines in U.S. output add support to forecasts of deep reductions in output nationwide, as high-cost U.S. shale producers continue to be forced offline due to prohibitively low oil prices. Over the weekend, IEA head Faith Birol said he expects production outside OPEC to fall by as much as 700,000 bpd in 2016, an amount which would represent the steepest decline in 25 years.

Overnight, oil prices moved slightly lower on Tuesday, amid a recovering dollar, as crude futures reversed course from overnight trading ahead of the release of fresh inventory data after the close of trading.
U.S. crude futures suffered their second straight losing session, continuing their retreat from yearly highs near $47 a barrel last week. WTI crude has rallied by more than 50% from its level in mid-February when it plunged to 13-year lows at $26.05 a barrel.

On the Intercontinental Exchange (ICE), Brent crude for July delivery wavered between $44.63 and $46.41 a barrel, before closing at $45.02, down 0.81 or 1.78%. North Sea brent futures are also down moderately from five-month highs hit last week when the international benchmark of crude surged above $48 a barrel.

Elsewhere, sources told Reuters that Saudi Arabia and Iran appear split on a long-term strategy aimed at stabilizing global oil market prices. The Persian Gulf rivals were reportedly unable to agree on a consensus at an OPEC Board of Governors meeting in Vienna on Monday. In April, OPEC production jumped to 32.64 million bpd, less than 0.2 million bpd from OPEC's all-time record high. OPEC meets next at a semi-annual meeting on June 2. Despite the recent upswing, crude prices are still down by more than 40% since OPEC roiled markets with a strategic decision to abandon price stability for market share in November, 2014.

Latest comments

I like how speculator's media trying to force oil prices up:. "U.S. production for the week ending on April 22 fell sharply by 15,000 barrels per day", "OPEC production raised slightly by ~130 000 barrels per day" etc.
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