November futures dropped 0.5 percent in New York after climbing 1.6 percent Wednesday. Gasoline supplies dropped a third week to the lowest level since November 2015, while distillate stockpiles fell by the biggest amount since 2011, according to government data. Crude inventories expanded by 4.59 million barrels last week, more than the 3.9 million-barrel gain projected in a Bloomberg survey. U.S. oil production also rose a second week.
While crude has rebounded this month, prices have struggled to hold above $50 a barrel this year as rising U.S. output stifles supply curbs by the Organization of Petroleum Exporting Countries. An OPEC ministerial meeting in Vienna Friday will discuss the possibility of extending the cuts beyond March, Algeria Press Service cited Algeria’s Energy Minister Mustapha Guitouni as saying, while Saudi Arabia and others have mooted a possible extension. Meanwhile in the U.S., Secretary of State Rex Tillerson has highlighted flaws in the 2015 international nuclear deal with Iran.
“The market focused on the sharp recovery in crude demand implied” by the decline in fuel inventories on Wednesday, said Jens Naervig Pedersen, a senior analyst at Danske Bank A/S in Copenhagen. “It adds to the bullish sentiment buoyed by concerns about the Iran nuclear deal and headlines about OPEC looking at a possible extension of output cuts.”
West Texas Intermediate for November delivery was at $50.42 a barrel on the New York Mercantile Exchange, down 27 cents, at 11:47 a.m. London time. Total volume traded was about 36 percent below the 100-day average. The October contract expired Wednesday after gaining 1.9 percent to close at $50.41.
Brent for November settlement lost 27 cents to $56.02 a barrel on the London-based ICE Futures Europe exchange, after advancing $1.15 on Wednesday. The global benchmark crude traded at a premium of $5.63 to WTI.
U.S. gasoline stockpiles fell by 2.13 million barrels last week to 216.2 million, the Energy Information Administration reported Wednesday. Distillate inventories, a category that includes diesel, dropped by 5.69 million barrels. Crude output expanded by 157,000 barrels a day to 9.51 million a day.
more at: https://www.bloomberg.com/news/articles/2017-09-20/oil-holds-above-50-as-fuel-stockpile-drop-counters-crude-gain