API Reports Seventh Large Crude Draw In Seven Weeks

Randall Padilla
January 18, 2018

Brent on Monday hit 70.37 dollars a barrel, its highest since December 2014, which was at the beginning of a three-year oil price slump.

On Wednesday it fell upon Bakheet Al-Rashidi, oil minister for Kuwait, to attempt to bring about calm in analytical circles: he told reporters that OPEC and other producers won't be discussing how to end the cuts when they meet this weekend in Oman.

US West Texas Intermediate (WTI) crude futures were at $64.25 a barrel, up 28c or 0.4% from their last settlement. WTI marked it highest since December 2014 at $64.89 on Tuesday. United States shale oil output will increase by a good 111,000 barrels a day next month to 10-million barrels a day and. will rise to about 11-million barrels a day by the end of next year.

According to reports, in an effort to tighten markets and prop up prices, OPEC and Russian Federation started to withhold production in January previous year and the cuts are set to last through 2018.

Data from the American Petroleum Institute (API) on Wednesday showed a well supplied fuel product market, which could mean lower crude demand going forward.

OPEC and Non-OPEC members agreed during a meeting in Vienna in Dec 10, 2016 to limit oil output in reaction to a drop in oil prices at the time.

If successful, the country, where Italy's ENI and France's Total are among the operators, will be the no. 3 oil producer in sub-Saharan Africa, analysts say. "This would put the U.S. on par with Saudi Arabia and Russia's output", Razaqzada said.

Petrol stocks rose by 1.8-million barrels while distillate fuels stockpiles, which include diesel and heating oil, climbed by 609,000 barrels, the API data showed.

The continued drop in U.S. crude oil inventories corresponded to a decline in USA production for the week ending January 5, coming in at 9.492 million bpd compared to the week prior of 9.782 million bpd.

The American Petroleum Institute (API) data revealed a 5.121-million-barrel draw of the US crude oil inventories for the week ending January 12, marking another large draw in weeks.

Norbert Ruecker, head of commodity research at Swiss bank Julius Baer, also said that "hedge fund expectations for further rising prices have reached excessive levels", threatening prices.

Official U.S. oil inventory and production data is due on Thursday from the Energy Information Administration (EIA).

Other reports by AllAboutTopnews

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