Oil Prices Hold Gains as Stockpile Numbers Hike

Katrina Barker
September 15, 2017

However, crude stockpiles in the USA have ballooned recently as Harvey crippled refinery production in the Texas and Louisiana region.

Traders have been watching the level of commercial crude oil and petroleum product inventories for much of the year in part to gauge the impact of an effort led by the Organization of Petroleum Exporting Countries to balance an oversupplied market with managed production declines.

Global output was down by 720,000 barrels a day last month from July, to 97.7 million barrels a day, the International Energy Agency said Wednesday.

On the New York Mercantile Exchange crude futures for October delivery rose 1.2% to settle at $48.07 a barrel, while on London's Intercontinental Exchange, Brent lost 0.04% to trade at $53.76 a barrel. Refinery utilization rates fell by two percentage points.

The U.S. dollar, meanwhile, has declined steadily and, when the value of the greenback falls, commodity prices increase because more dollars are required to purchase the same quantity as when the value was higher.

US crude stocks rose sharply last week as refinery output declined further in the wake of Hurricane Harvey, causing gasoline stocks and distillate inventories to drop as well, the Energy Information Administration said on Wednesday.

Although the OPEC monthly report did not mention oil exports, earlier in August oilprice.com put Iran's crude oil exports at 2.135 million bpd in August, a 9.3 rise from its previous month citing energy data provider Kpler. Gasoline stockpiles were down 8.4 million barrels for the week, while distillate stockpiles fell 3.2 million barrels, according to the EIA.

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