Oil Prices Fall as U.S. Crude Inventory Data Disappoints
August 24 2016 - 10:37PM
Dow Jones News
By Jenny W. Hsu
Crude oil prices inched lower in early Asia trade Thursday as
the surprise build in U.S. crude inventories last week disappointed
investors.
U.S. commercial stockpiles of crude oil and refined products
increased by 6.6 million barrels in the week ended Aug. 19 to a
record 1.4 billion barrels, the Energy Information Administration
said, an indication that the global glut of crude that has weighed
on prices for two years has yet to fully shrink.
On the New York Mercantile Exchange, light, sweet crude futures
for delivery in October traded at $46.68 a barrel at 0143 GMT, down
$0.09 in the Globex electronic session. October Brent crude on
London's ICE Futures exchange fell $0.07 to $48.98 a barrel.
"The highlight of this report was the bearish and unexpected
build in crude," said Michael Wittner, the chief commodities
analyst at Societe Generale, in a note.
Crude-oil stockpiles rose by 2.5 million barrels in the latest
week. Analysts surveyed by The Wall Street Journal had expected
crude supplies to have fallen slightly in the week.
Analysts say strong imports--an increase of 449,000 barrels per
day from last week--and slower refining activities were the main
drivers behind the increase. At 523.5 million barrels, U.S. crude
inventories are at historically high levels for this time of the
year, the EIA said.
"Brent also came under pressure after Iraq said it still isn't
producing as much as it should be, raising concerns that the
Organization of the Petroleum Exporting Countries will continue to
increase," said ANZ Research.
Iraq's new oil minister Jabbar al-Luaybi in a meeting with
international oil companies on Tuesday expressed the country's
support for these foreign players to "raise the levels of
production and exportation," according to a statement on the Iraq's
oil ministry website.
"We observed some of the problems and challenges which are
facing the foreign oil companies, and we will work to solve them in
order to develop the work and raise the production of oil and gas
in order to raise the national outcome," the minister said in the
statement.
As OPEC's second largest producer, Iraq pumped out 4.32 million
barrels a day in July, according to the group's latest oil
report.
Iraq's intention to raise output is one of many potential upside
risks that the market is monitoring as Nigeria and Libya, whose
production and exports were stunted by militant attacks in recent
months, are also gearing to ramp up their output.
Energy investors will be paying attention to the Jackson Hole
symposium which begins later today and is being attended by Federal
Reserve chairwoman Janet Yellen.
"The market hopes [she] would offer clarity on Federal Reserve
monetary policy stance," said Barnabas Gan, an economist at
OCBC.
Nymex reformulated gasoline blendstock for September--the
benchmark gasoline contract--fell 98 points to $1.4998 a gallon,
while September diesel traded at $1.4942, 21 points lower.
ICE gasoil for September changed hands at $434.50 a metric ton,
up $2.50 from Wednesday's settlement.
Nicole Friedman contributed to this article.
Write to Jenny W. Hsu at jenny.hsu@wsj.com
(END) Dow Jones Newswires
August 24, 2016 22:22 ET (02:22 GMT)
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