Sign Up for FREE Daily Energy News
  • Stay Connected
  • linkedin
  • twitter
  • facebook
  • instagram
  • youtube2
WEC - Western Engineered Containment
Copper Tip Energy Services
Hazloc Heaters
Hazloc Heaters
WEC - Western Engineered Containment
Copper Tip Energy

Oil Slips as U.S. Product Stockpiles Build, Traders Take Profit

October 19, 2017


Oil dropped in New York, snapping four days of gains, as traders took profit amid disruption in Iraq and U.S. product inventories grew.

Futures fell as much as 1.7 percent after rising almost 3 percent the past four sessions. Gasoline stockpiles expanded for a fourth week, while distillate supplies rose for the first time since August, U.S. Energy Information Administration data showed. In the Middle East, exports from northern Iraq fell by two-thirds amid fighting between government troops and Kurdish forces.

Crude had risen since late last week as tensions in Iraq, OPEC’s second-largest producer, led to the halt of production at two Kirkuk fields. The resulting export curbs pushed oil in the U.S. to a three-week high on Wednesday, but Brent has failed to breach last month’s peak and dropped below $58 following the inventory data.

Prices reflect “oil bulls taking profit after the supply disruption in Iraq failed to drive Brent to new highs,” said Ole Hansen, head of commodity strategy at Saxo Bank A/S. “It’s a classic risk-off move. On balance, I believe yesterday’s EIA report was net bearish.”



West Texas Intermediate for November delivery, which expires Friday, dropped as much as 89 cents on the New York Mercantile Exchange, and was down 85 cents at $51.19 a barrel as of 8:18 a.m. local time. Prices closed at $52.04 on Wednesday, the highest since Sept. 27. Total volume traded Thursday was about 7 percent above the 100-day average. The more-active December contract lost 84 cents to $51.42.

Inventory Gains

Brent for December settlement fell 96 cents to $57.19 a barrel on the London-based ICE Futures Europe exchange, after adding 27 cents on Wednesday. The global benchmark crude was at a premium of $5.77 to WTI for the same month.

U.S. gasoline inventories expanded by 908,000 barrels last week, while distillate supplies climbed to 134.5 million barrels, according to the EIA. Refinery utilization slipped as plants including Exxon Mobil Corp.’s Joliet refinery in Illinois were said to carry out maintenance.

In northern Iraq, flows by pipeline to the Turkish port of Ceyhan fell below 200,000 barrels a day on Thursday from a normal daily level of 600,000 barrels, according to a port agent report. Production in the disputed Kirkuk province has slumped at fields captured by the government from the Kurds following a Kurdish independence referendum on Sept. 25.

For a Gadfly column on how the halt in Iraq could be temporary, click here

OPEC sent its strongest signal yet for an extension of production cuts until the end of 2018, saying preparations for the next meeting are taking their lead from Russian President Vladimir Putin’s tentative backing for a further nine-months of curbs. The producers’ group has defied the skeptics in eliminating half the oil-inventory surplus, said Secretary-General Mohammad Barkindo.

Other oil-market news:

U.S. crude inventories shrank by 5.73 million barrels to 456.5 million barrels last week, EIA data show. Supplies at the Cushing, Oklahoma, hub rose for an eighth straight week to the highest level since May. Saudi Energy Minister Khalid Al-Falih plans to visit OPEC members Iraq and Algeria and non-OPEC producers Kazakhstan and Malaysia before OPEC’s Nov. 30 meeting, according to people with knowledge of the trip. The world’s biggest oil traders say crude could rise above $60 a barrel in a year as demand grows and OPEC keeps cutting. Or it might fall to $45 as another wave of U.S. shale hits the market.

Share This:

More News Articles

New SHOWCASE Directory Companies


Delta Remediation Inc.
Muddy Boots
The Coverall Shop
Axis Communciations
Smart-Project Management Inc. / Trusted Pipeline Advisor
Payload Technologies Inc.
Vista Projects Limited