Oil Slips as US Gasoline Stockpiles Climb, Crude Supplies Drop
Although crude inventories fell by 840,000 barrels in the week to April 14 to 531.6 million barrels, still close to record highs, gasoline stocks rose by 1.4 million barrels as refinery crude oil runs increased by 334,000 bpd, the API said. US crude futures were up 6 cents at $50.50 a barrel.
OPEC members Saudi Arabia and Kuwait signaled that the Organization of the Petroleum Exporting Countries and other producers, including Russian Federation, would likely extend their oil output cut beyond June.
Gasoline stocks also posted a counter-seasonal build of 1.4 MMbbl.
U.S. West Texas Intermediate (WTI) crude futures were down 51 cents at $52.67 a barrel, after rising 7 cents to $53.18 on Thursday.
OPEC leader, Saudi Arabia, tightened February crude oil exports to the lowest since mid-2015, official data showed yesterday. A surprise build in gasoline inventories despite heavier refining activity, along with an increase in US crude production, pushed prices lower.
"Crude oil prices were slightly weaker as the focus turned back to USA inventories and output", ANZ bank said on Wednesday.
The oil price got an early lift from comments by the secretary-general of the Organization of the Petroleum Exporting Countries, who said the group was committed to restoring market stability by bringing global inventories down to the industry's five-year average. WTI futures settled at $52.41 a barrel, down 24 cents. U.S.
Opec exempted Nigeria and Libya a year ago from cutting production, due to their internal conflicts, while it agreed to let Iran pump an additional 90,000 barrels a day to reach output of about 3.8 million.
Oil producers are showing "very good" compliance with pledged production cuts, Saudi Energy Minister Khalid Al-Falih said Monday in Riyadh.
OPEC and top nonmember producers reportedly will meet May 25 as they remain publicly undecided over whether to extend production cuts.
Geopolitical concerns have also helped underpin oil.
"The market sentiment appears to be that the increase in USA shale production outweighs the OPEC action and the market is keeping the loss we had yesterday", he said.
The market will watch Wednesday morning to see if US government data confirms the API report.
The United States is working with allies and China on responses to the failed test, U.S. President Donald Trump's national security adviser said on Sunday.