Oil Declines in New York as U.S. Crude and Fuel Supplies Gainby
Crude inventories climbed 2.84 million barrels last week: EIA
Accord participants ‘highly committed’ to output deal: Kuwait
Oil declined after a U.S. government report showed crude and fuel inventories increased.
Futures fell 0.8 percent in New York. Crude supplies rose 2.84 million barrels in the week ended Jan. 20, the Energy Information Administration said. Gasoline stockpiles climbed a fourth week. While Kuwait expects complete compliance with a pact between OPEC and non-OPEC nations, some countries haven’t fully carried out the cuts yet, said Oil Minister Essam Al-Marzouk, who chairs the panel that will oversee the curbs.
"There’s lots of talk about OPEC, non-OPEC production cuts but the fact remains that U.S. crude supplies are very high and rising," Thomas Finlon, director of Energy Analytics Group in Wellington, Florida, said by phone. "Gasoline always rises at this time of year but this is different. I am surprised by the velocity of supply growth."
Oil has held above $50 a barrel since the Organization of Petroleum Exporting Countries and 11 other nations agreed late last year to curb supply by about 1.8 million barrels a day. While Saudi Arabia says more than 80 percent of the targeted reduction has been implemented since the deal took effect on Jan. 1, the International Energy Agency predicted a rebound in shale output as prices rise. U.S. drillers last week added the most rigs to oil fields since 2013.
West Texas Intermediate for March delivery dropped 43 cents, or 0.8 percent, to $52.75 a barrel on the New York Mercantile Exchange. Total volume traded was about 7 percent above the 100-day average.
Brent for March settlement declined 36 cents to $55.08 a barrel on the London-based ICE Futures Europe exchange. The global benchmark crude closed at a $2.33 premium to WTI.
Nationwide crude inventories rose to 488.3 million, the highest since November. Supplies at Cushing, Oklahoma, the biggest U.S. storage hub and the delivery point for WTI, fell 284,000 barrels last week.
Refineries processed 16 million barrels a day of crude last week, down 421,000 barrels from the prior week, the report showed. Refineries operated at 88.3 percent of capacity, down 2.4 percentage points from the prior week, and the lowest since November.
U.S. gasoline stockpiles rose 6.8 million barrels to 253.2 million, the highest since February. Inventories of distillate fuel, a category that includes diesel and heating oil, increased 76,000 to 169.1 million.
Gasoline futures for February delivery dropped 3.3 percent to $1.5238 a gallon, the lowest close since Dec. 9.
- Libya is pumping 715,000 barrels a day of oil, the most since 2014, and is on track to keep boosting output this year, National Oil Corp. Chairman Mustafa Sanalla said Tuesday in London.
- Oil demand growth will slow and supplies will remain abundant in the coming decades, BP Plc said on Wednesday in its Energy Outlook 2035 report.
- While President Donald Trump works to advance two controversial oil pipelines -- Dakota Access and Keystone XL, a war’s being fought in Washington over a whole other set of lines: natural gas ones.