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Oil prices drop, U.S. falls for third day as Cushing stocks rise

Published 10/29/2019, 09:36 PM
Updated 10/29/2019, 09:40 PM
Oil prices drop, U.S. falls for third day as Cushing stocks rise
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TOKYO (Reuters) - Oil prices slipped on Wednesday, with U.S. crude falling for a third day after an industry report that stocks at the Cushing delivery hub for the benchmark rose last week, shrugging off a drop in overall inventories.

Brent crude was down 15 cents, or 0.2%, at $61.44 a barrel by 0118 GMT after gaining 2 cents on Tuesday.

U.S. West Texas Intermediate (WTI) crude was down 18 cents, or 0.3%, at $55.36 a barrel, having dropped 0.5% in the previous session.

Crude stocks at the Cushing, Oklahoma, delivery hub for WTI rose by 1.2 million barrels, the American Petroleum Institute (API), an industry group, said.

"Price action over the past 48 hours does illustrate just how quick traders are to revive fears about sluggish demand amid the thought of more abundant supplies," said Stephen Innes, Asia Pacific market strategist at AxiTrader.

Demand concerns remain strong amid the 16-month old trade war between the United States and China, which has hit economic growth around the world, sapping demand for oil.

The United States and China were continuing to work on an interim trade agreement, but it may not be completed in time for U.S. and Chinese leaders to sign it next month, a U.S. administration official said.

The latest potential setback in the negotiations stalled a rally in global share markets.

Russia's deputy energy minister also said on Tuesday it was too early to talk of deeper output cuts by OPEC and its allies, adding to the pressure on the market.

The Organization of the Petroleum Exporting Countries and other producers including Russia - a grouping referred to as OPEC+ - have cut oil output by 1.2 million barrels per day to support prices since January.

U.S. crude inventories fell by 708,000 barrels in the week ended Oct. 25 to 436 million, compared with analysts' expectations for an increase of 494,000 barrels, according to the API data.

Gasoline stocks dropped by 4.7 million barrels, compared with analyst expectations for a drop of 2.2 million barrels, and distillate stocks were down by 1.6 million barrels, versus an expected fall of 2.35 million barrels.

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