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NYMEX crude up in Asia as API build lower than expected

CommoditiesSep 13, 2016 07:38PM ET
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© Reuters. NYMEX crude gains after API build

Investing.com - Crude oil prices gained in Asia on Wednesday after U.S. industry data showed a lower than expected build in stockpiles.

Crude oil for October delivery on the New York Mercantile Exchange rose 0.60% to $45.19 a barrel.

The American Petroleum Institute said crude supplies rose by 1.4 million barrels at the end of last week, a figure that comes after a massive 12.1 million barrel draw the previous week with the data said to be distorted by the impact of hurricane Hermine that prevented crude being unloaded into storage facilities. Analysts had expected a build of as much as 4 million barrels.

Gasoline stocks fell 2.4 million barrels, building on a drop of 2.3 million barrels in the previous week, while distillates showed a build of 5.3 million barrels. There was a 1.1 million barrel draw in Cushing.

Ahead Wednesday, the U.S. Department of Energy will release official statistics on crude and refined product stockpiles.

Overnight, oil prices plunged on Tuesday, after the International Energy Agency warned that oil markets would likely remain oversupplied next year due to a slowdown in demand.

The IEA had previously expected the market to show no surplus in the second half of this year.

In its monthly report released earlier in the session, the IEA sharply cut its forecast for global oil demand for this year and the next amid what it called “wobbling” Asian demand.

The Paris-based agency downgraded its global oil demand predictions by about 100,000 barrels a day for this year to 1.3 million barrels a day. It also reduced the forecasts by about 200,000 barrels a day in 2017.

The IEA's latest comments follow a surprisingly bearish outlook from OPEC on Monday.

On the ICE Futures Exchange in London, Brent oil for November delivery fell by more than 2% to hit a daily low of $47.18 a barrel.

Meanwhile, oil traders continued to weigh prospects that major oil producing nations will freeze output to support the market when they meet later this month.

The Organization of the Petroleum Exporting Countries, led by Saudi Arabia and other big Middle East crude exporters, will meet non-OPEC producers led by Russia at informal talks in Algeria between September 26 and 28.

Chances that the upcoming meeting would yield any action to reduce the global glut appeared minimal, according to market experts. Instead, most believe that oil producers will continue to monitor the market and possibly postpone freeze talks to the official OPEC meeting in Vienna on November 30.

An attempt to jointly freeze production levels earlier this year failed after Saudi Arabia backed out over Iran's refusal to take part of the initiative, underscoring the difficulty for political rivals to forge consensus.

NYMEX crude up in Asia as API build lower than expected
 

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