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The American Petroleum Institute (API) reported that US crude stocks rose by 4.8 MMbbl in the week ended October 21 vs. a 1.7 MMbbl build forecast by analysts polled by Reuters.
Overnight, the American Petroleum Institute (API) said oil supplies surged upwards by 4.8m barrels stateside for the week ended 21 October, almost wiping out 5.2-million-barrel draw recorded the week before. To the very minimum, there would be an increase in the production from these countries by 0.8 million barrels.
Losses were limited as a flurry of deal activity boosted stock prices on Wall Street and as data by energy monitoring firm Genscape showed a draw of about 1.0 million barrels of crude at the Cushing, Oklahoma delivery hub for WTI during the week to October 21.
The price of oil has this month risen to its highest so far this year, having gained more than 10 percent in the four weeks since the Organization of the Petroleum Exporting Countries agreed to cut production and rein excess global supply.
Prices are now hovering at around US$50 per barrel after hitting a 10-year low of less than $30 in January, down from a peak of more than $100 in mid-2014.
Brent for December settlement lost as much as 66 cents, or 1.3 percent, to $50.13 a barrel on the London-based ICE Futures Europe exchange. Analysts surveyed by the Wall Street Journal estimate a 2.1-million barrel build in US crude stocks.
Crude inventories posted an unexpected drop of 553,000 barrels last week, and stocks of gasoline and distillates fell more than expected, raising hopes that a long-awaited market rebalancing is finally under way. “The official USA inventory data will be a crucial number for the market”. Iraqi oil minister Jabar Ali al-Luaibi said Iraq should be exempt from any production cut because of the wars it has fought since the 1980s has not allowed them to achieve their oil production destiny.
Iraq has also maintained that its production numbers differ from data estimated by OPEC. Distillate product supplied averaged about 4.1 million barrels a day over the past four weeks, up by 2.5% compared with the same period previous year. Analysts were looking for a draw of 1.9 million barrels.
Now, it appears that Iraq with its all-out rejection to join a deal has spurred other smaller producers to be less cooperative.
Saudi Arabian officials were bullish about oil on Sunday, saying the two-year decline that pushed prices from $114 per barrel to as low as $28 in January, will soon be over.
He added that a cut or production freeze was the best option to stabilize oil prices.
“The low oil prices took a toll on OPEC members who are so reliant on oil for their economies”.
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OPEC and non-member Russian Federation have held regular meetings to tighten cooperation to bolster low oil prices. Iraq is the second-largest OPEC producer after Saudi Arabia.
