Oil Prices Near Flat After EIA Data Show Drop in U.S. Crude Supplies
18 October 2017 - 5:17PM
Dow Jones News
By Alison Sider
Oil prices pared gains and at times slipped into negative
territory Wednesday as oil stockpiles fell but supplies of gasoline
and diesel rose.
U.S. crude futures recently fell 5 cents, or 0.1%, at $51.83 a
barrel on the New York Mercantile Exchange -- edging lower from a
high of $52.33 a barrel in earlier trading. Brent, the global
benchmark, was up 5 cents, or 0.09%, to $57.93 a barrel on ICE
Futures Europe.
The U.S. Energy Information Administration reported that crude
inventories fell by 5.7 million barrels last week -- more than the
3.2 million barrels that analysts were expecting, according to a
survey by The Wall Street Journal.
But some of that was driven by a sharp but temporary decrease in
oil output as offshore producers shut in around Hurricane Nate,
which hit the Gulf Coast earlier this month. U.S. production fell
nearly 1.1 million barrels a day last week, according to the
EIA.
"Normally we would expect the market to have a more positive
tone to it, but people are expecting we'll jump back up," said Gene
McGillian, research manager at Tradition Energy. "This report is
basically being shrugged off because of the effects of Nate."
Much of the draw from oil stockpiles was driven by another big
increase in exports of U.S. crude, which rose to 1.798 million
barrels a day -- their second highest level on record. Exports have
surged in recent weeks as the price difference between U.S. and
global crude benchmarks has widened, making it more lucrative to
sell U.S. oil overseas.
But some analysts said the high export numbers could become
bearish if they weaken the resolve of members of the Organization
of the Petroleum Exporting Countries and other major exporters that
have been holding production off the market.
"We continue to believe that these levels of U.S. exports...will
only increase pressure on Saudi market share in key Asian demand
centers such as China, pressuring Saudi's commitment to OPEC
production accords over time," Chris Kettenmann, chief energy
strategist at Macro Risk Advisors, wrote in a research note.
Also weighing on investors was data showing that refinery
utilization fell sharply, from 89.2% to 84.5%, but gasoline
inventories still grew by about 900,000 barrels. That could be a
sign that demand is due to drop off following the end of summer
driving season, analysts said.
Gasoline futures fell 0.67 cent, or 0.41%, to $1.6243 a gallon.
Diesel futures fell 1.41 cents, or 0.78%, to $1.7957 a gallon.
Write to Alison Sider at alison.sider@wsj.com
(END) Dow Jones Newswires
October 18, 2017 12:02 ET (16:02 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.