JULY 13, 2017 – Oil traded near $45 a barrel as investors weigh resurgent U.S. output against declining crude and gasoline stockpiles.
Futures were little changed in New York after rising 2.9 percent the previous three sessions. Crude production last week expanded to the highest since July 2015, according to government data Wednesday. Crude inventories fell by 7.56 million barrels, more than triple the median estimate in a Bloomberg survey and the most since September. Gasoline supplies slid for a fourth week.
Oil remains in a bear market on concern rising global supply will offset curbs by the Organization of Petroleum Exporting Countries and its partners including Russia. OPEC’s first assessment of world markets in 2018 suggested that its current output, at 32.6 million barrels a day, will be too high as rival supplies expand and demand growth remains steady.
“Oil will be in a bear market for a while as traders are concerned about the continuous production growth in the U.S.,” said Kim Kwang Rae, a commodities analyst at Samsung Futures Inc. in Seoul. “U.S. crude stockpiles dropped more than the market expected, which will give temporary support to oil prices.”
West Texas Intermediate for August delivery was at $45.47 a barrel on the New York Mercantile Exchange, down 2 cents, at 7:53 a.m. in London after losing as much as 0.6 percent earlier. Total volume traded was about 33 percent below the 100-day average. Prices gained 45 cents to $45.49 on Wednesday.
Brent for September settlement dropped 4 cents to $47.70 a barrel on the London-based ICE Futures Europe exchange. Prices advanced 22 cents, or 0.5 percent, to close at $47.74 on Wednesday. The global benchmark crude traded at a premium of $2.07 to September WTI.
U.S. crude production rose by 59,000 barrels a day to 9.4 million, climbing for a second week, according to the Energy Information Administration. Gasoline stockpiles fell by 1.65 million barrels to 235.7 million.