Oil extends declines on US inventory build

01 Mar, 2018 9:52 am

TOKYO (Reuters) – Oil prices extended declines on Thursday after official data showed a larger-than-expected increase in US crude inventories and a surprise build in gasoline stocks.

US West Texas Intermediate crude for April delivery CLc1 was down 11 cents at $61.53 a barrel by 0100 GMT after settling down $1.37.

New front-month London Brent crude LCOc1 for May delivery was down 16 cents at $64.57, having ended down $1.79. The April contract expired on Wednesday, settling down 85 cents at $65.78.

Some industry sources said Wednesday’s decline was also due to profit-taking by market participants at the end of the month after oil hit a three-week high earlier this week.

US crude inventories rose by 3 million barrels last week, compared with analyst expectations for a build of 2.1 million barrels, weekly data by the Energy Information Administration (EIA) showed.

Gasoline stocks also rose by 2.5 million barrels against expectations for a 190,000-barrel drop, which pushed gasoline futures sharply lower. Distillate stockpiles, which include diesel and heating oil, fell by 1 million barrels, versus expectations for a 709,000-barrel drop.

Soaring US production has kept a lid on oil prices this year, even though the Organization of the Petroleum Exporting Countries and Russia have reduced output.

US crude oil production rose to a record 10.057 million barrels per day (bpd) in November and retreated slightly in December to 9.949 million bpd, the EIA said on Wednesday.

OPEC oil output fell in February to a 10-month low as the United Arab Emirates joined other Gulf members in over-delivering on a supply reduction pact, a Reuters survey found on Wednesday, pushing compliance with the deal to its highest at 149 percent.

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