November 15, 2017 Bloomberg
Oil fell back toward $55 a barrel after U.S. industry data showed an unexpected jump in crude stockpiles and Russia wavered on whether OPEC needs to extend output cuts this month.
Futures lost as much as 1.3 percent in New York after falling 1.9 percent on Tuesday. U.S. inventories rose by 6.51 million barrels last week, the American Petroleum Institute was said to report. That would be the biggest gain since March if confirmed in government data released at 10:30 a.m. in Washington on Wednesday.
Oil rose to a two-year high last week on signs of tightening supplies and a possible extension of output curbs by the Organization of Petroleum Exporting Countries and its allies. Still, OPEC has yet to convince Russia, one of its partners in the deal, that a decision to prolong output cuts is needed when the group meets in Vienna this month. The Russian government has yet to reach a consensus with the nation’s oil companies on extending the deal.
“The API data showed an inventory build, in contrast to expectations of a draw, which is weighing on the market,” said Giovanni Staunovo, a commodity analyst at UBS Group AG. “The Russian news doesn’t help either.”
West Texas Intermediate for December delivery slid as much as 73 cents to $54.97 a barrel on the New York Mercantile Exchange and traded at $55.06 as of 8:32 a.m. New York time. Total volume traded was about 20 percent below the 100-day average. Prices dropped $1.06 on Tuesday. December WTI options contracts expire Wednesday.
See also: OPEC approaches meeting without clear plan on how to extend cuts
Brent for January settlement fell as much as 90 cents, or 1.5 percent, to $61.31 a barrel on the London-based ICE Futures Europe exchange, after dropping 1.5 percent on Tuesday. The global benchmark was at a premium of $6.26 to January WTI.
Gasoline inventories rose by 2.4 million barrels last week, the API said Tuesday, according to people familiar with the data. While the U.S. industry group also reported a gain in crude stockpiles, a Bloomberg survey showed they may have shrunk by 2.4 million barrels.
“The API build doesn’t really bode well,” Nitesh Shah, a commodity strategist at ETF Securities, said by phone. “If the EIA numbers follow in the same step, then we’ll probably continue to lose from where we are.”
- Russia believes it’s too early to announce an extension to OPEC-led cuts this month, two people with knowledge of the matter said. Another issue is a duration of the extension, with options including an additional three months of cuts being considered.
- Crude inventories in Amsterdam, Rotterdam and Antwerp rose by 2.9 million barrels last week, Genscape data show.
- Angolan President Joao Lourenco dismissed the entire board of state-owned oil producer Sonangol, including Isabel dos Santos as chairman, RNA reports, citing the presidency.