Oil Heads for Weekly Loss as Doubts Over Rebalancing Persist

Futures dropped as much as 2.8 percent even after U.S. data on Thursday showed the nation’s crude stockpiles dropped by 6.3 million barrels, three times as much as expected. Investors remain doubtful that OPEC-led production cuts will clear a global glut, after Russia ruled out deepening the measures and Saudi Arabia showed less commitment than earlier in the year.

“Oil remains volatile, unable to hold onto gains even after strong inventory draws in the U.S.,” said Jan Edelmann, an analyst at HSH Nordbank AG in Hamburg. “While the strong draws are a step in the right direction, multiple weeks of the same are now needed for the rebalancing.”

West Texas Intermediate for August delivery lost as much as $1.28 to $44.24 a barrel on the New York Mercantile Exchange and was at $44.28 as of 9:41 a.m. in London. Total volume traded was about 44 percent above the 100-day average. The contract gained 39 cents to $45.52 Thursday, rebounding from the biggest loss in four weeks. Prices are down 3.8 percent this week.

Brent for September settlement lost as much as $1.29, or 2.7 percent, to $46.82 a barrel on the London-based ICE Futures Europe exchange. The contract added 32 cents to $48.11 on Thursday. Prices are down 0.9 percent this week. The global benchmark traded at a premium of $2.37 to September WTI.

U.S. crude production increased by 88,000 barrels a day last week to 9.34 million, the EIA said in a report Thursday. Output had slid by 100,000 barrels a day through June 23 amid field maintenance in Alaska and the impact of tropical storm Cindy. Gasoline stockpiles fell by 3.7 million barrels.
more at:  https://www.bloomberg.com/news/articles/2017-07-06/oil-slips-toward-45-as-u-s-output-jump-offsets-stockpile-drop