U.S. crude’s front-month contract was down 25 cents at $39.06 a barrel by 12:03 p.m. EDT.
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Shares of Suncor Energy (SU – Get Report) were gaining 5.9% to $27.51 on Thursday afternoon, as oil prices were rebounding from recent losses. But weekly stocks rose by 1.7 million barrels, counter to forecasts for a draw.
Crude stockpiles fell 5.5 million barrels for the week ended August. 21. Compared with June 2014, total light crude oil exports are down 10 percent.
Just earlier this month, the U.S. Department of Commerce’s Bureau of Industry and Security approved an application from Mexico’s state-run oil company PEMEX to do a crude oil swap with American producers.
Retail power costs in the island state, the highest in the U.S., dropped 23 percent in June from a year earlier because of tumbling crude, according to the U.S. Energy Information Administration. Most are bracing for a rise in stocks over the coming months as refiners shut for seasonal work. “In a few weeks from now, we will look back at this draw as a one off”, Zahir said, citing the end of the U.S. summer driving season and record pumping of OPEC crude.
These outages created incentives for Midwest refiners still operating to maximize production, as crude oil input costs sank while gasoline prices rose.
Analysts and brokers also noted crude stocks in the West Coast region fell 2.3 million barrels, or 40 percent of the total inventory slide.
But that’s about 30 per cent less than the almost 120,000 barrels a day that were exported by rail in the first quarter.
Refinery use is seen falling 0.6 percentage point to 94.5% of capacity, based on EIA data.
Gasoline stocks increased 1.66 million barrels last week to 214.4 million barrels, EIA said.
“We would not underestimate the current bearish momentum and still believe that it is possible to see prices break supports of United States dollars 38 and USD 45 for WTI and Brent”, Ang said.
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Distillate stockpiles, which include diesel and heating oil, rose by 1.4 million barrels, versus expectations for a 1.0 million barrels increase, the EIA data showed.
