Benchmark Brent crude futures fell below the $46-a-barrel mark, trading down 1.7 per cent at $45.79 a barrel, down 80 cents, at 1045 GMT.
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Over the previous two sessions, oil prices fell six per cent, pressured by data showing large weekly builds in USA petroleum products, and forecasts by the world’s energy watchdog and OPEC that signalled the global crude glut could persist into 2017. Analysts at the Street expected EIA to report an increase in stockpiles by about 5.4 million BPD. However, the market was expecting 1.5 million barrels of buildup. U.S. West Texas Intermediate futures were down 36 cents, or 0.8 percent, at $43.55 a barrel.
However, U.S. crude inventories dropped by 559,000 barrels in the week to September 9, defying analysts expectations of a crude build of 3.8 million barrels. It was the biggest weekly build since January and put distillate stocks at six-year seasonal highs.
Following this report, the Energy Information Administration (or EIA) reported a surprise decline in inventories by 0.56 million barrels.
“We’ve seen a lot of bearish news this week: Libya, Nigeria, skeptical monthly reports from the IEA and OPEC and large stockbuilding in the USA, so weak fundamentals are weighing on the market”, said Frank Klumpp, oil analyst at Stuttgart-based Landesbank Baden-Wuerttemberg. Please read Crude Oil Is Stable in the Early Hours on September 14 to learn more. US equities rose more than 1 percent.
“I think that the market is focused really where it should be”, Abramo said. “Next week’s report will be telling, whether last week’s lost barrels finally show up in the petroleum balance sheet”, said John Kilduff, partner at NY energy hedge fund Again Capital. Crude oil prices rebounded after the EIA reported an unexpected weekly inventory drawdown.
Analysts believe that the resumption of Libya’s oil production and exports is a key development at the oil market ahead of OPEC’s meeting in Algeria.
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Gasoline futures were also supported by news BP Plc will conduct repairs this weekend on the large crude distillation unit at its 413,500 barrel per day Whiting, Indiana refinery, cutting production by at least 50 percent. On Wednesday, officials in Tripoli announced they plan to load the first crude-oil cargo in almost two years from a major port, Ras Lanuf. Gasoline futures settled down 1 percent.
