Oil Eases Off One-Month High On Surprise US Crude Build
NEW YORK, April 5 (Reuters) - Oil prices settled a shade firmer on Wednesday, easing from one-month highs, as support from an outage at the largest UK North Sea oilfield was offset by a surprise increase in U.S. crude inventories to a record high limited price gains.
News of the unplanned outage of the 180,000-barrels-per-day Buzzard field in the North Sea had already began to support prices on Tuesday. Sources said the repairs would take one to two days.
Prices, however, turned lower briefly on Wednesday after the U.S. government reported a rise in crude inventories of 1.6 million barrels last week.
Analysts had expected a decrease of 435,000 barrels, and the build reported by the Energy Information Administration came as a double surprise after trade group the American Petroleum Institute (API) reported a 1.8 million-barrel draw late on Tuesday.
"Yesterday's API report gave the market a bullish head-fake via three chunky draws, hence a build to crude stocks and minor draws to the products is causing a tempering of bullish optimism," said Matt Smith, director of commodity research at ClipperData in Louisville, Kentucky.
Brent futures ended the session up 19 cents, or 0.4 percent, at $54.36 a barrel after earlier touching $55.09, last traded on March 8. U.S. crude settled 12 cents, or 0.2 percent, higher at $51.15.
"The crude build caught the market leaning the wrong way. Crude exports dropped to 575,000 bpd this week, versus over 1 million bpd last week," said David Thompson, executive vice-president at Powerhouse, a commodities-focused broker in Washington.
"The selling most likely includes a fair number of sell stops being hit."
Still, there were positives in the data, traders and analysts said.
"Overall we think the data is fairly neutral," Standard Chartered said in a note.
It said total crude and product inventories fell 2 million barrels relative to their five-year average, in the right direction but significantly less than the previous week's 8.3 million barrel draw.
An output cut from Jan. 1 led by the Organization of the Petroleum Exporting Countries helped lift prices off last year's lows but rising U.S. output and high crude stocks have limited the rally.
Saudi Arabia cut the May official selling prices (OSP) for its light crude oil for Asian customers, in line with expectations, but raised the price for oil sales to the United States.
OPEC and non-OPEC producers, including Russia, together cut supply by about 1.8 million bpd for six months, and are considering whether to extend the agreement.
View Full Article
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
- Weatherford CEO's Rebound Plan Relies On Getting Smaller
- Iran Says Oil Market Is Too Tight For US Zero Exports Target
- China's Squeezed 'Teapots' Eye Petchem Path To Riches
- Baker Hughes: US Drillers Add Oil Rigs For Second Week In Three
- Venezuela Hands China More Oil Presence, But No Mention Of New Funds