Oil prices were largely unchanged on Wednesday, giving up earlier gains after the USA government reported a surprise crude stockpile build.
Advertisement
In truth, those hopes had dissipated after the American Petroleum Institute (API) reported yesterday a 2.1mln barrels week-on-week increase in its measure of USA crude stockpiles.
U.S. West Texas Intermediate (WTI) crude futures CLc1 were down 88 cents, or 2 percent, at $41.89 per barrel by 12:48 p.m. EDT (1627 GMT).
The EIA also reported that US gasoline stocks fell 2.8 million barrels last week in the second-biggest weekly draw for gasoline since mid-April.
In London, North Sea Brent for October delivery fell 93 United States cents to US$44.05 on the Intercontinental Exchange.
Oil prices have declined following improved prospects for U.S. production and an excess supply of crude and refined fuel products.
While there is an inventory overhang of USA crude and fuel stockpiles, Goldman Sachs forecasts the market will be in modest deficit in the second half of this year and the EIA sees consumption outpacing supply in 2017.
“The price of oil, for necessity, can and needs to rise to $70 a barrel”, Maduro said.
The drop has prompted some OPEC members to rally support for producers to agree steps to prop up prices. The country’s crude production fell to 2.1 million barrels a day in July, its lowest since 2003, according to the OPEC report. Saudi Arabia was planning to boost crude production to 10.5 million barrels a day for the 2016 summer, a person with knowledge of Saudi output policy said in April.
The agency now expects a decline in U.S. oil production by 700,000 barrels per day (bpd) this year to 8.73 million bpd. Refineries’ crude demand dropped 255,000 bpd from the prior week.
Advertisement
“The API figures have added pressure on prices, which are likely to continue to fluctuate until we see official figures from the US Department of Energy later tonight”, said IG Markets strategist Bernard Aw. Based on figures Opec collects from secondary sources, Opec pumped 33.11 million bpd in July, up 46,000 bpd from June. Iran still opposes any limits on its production, with the country seeking to reclaim its pre-sanctions share of OPEC’s total output before contributing to any production freeze, according to an OPEC delegate who asked not to be identified.
