Oil prices dipped on Wednesday, as refined product inventories in the United States rose in what the market interpreted as a sign of lacklustre demand.<\/p>\n
Brent crude futures, the international benchmark for oil prices, were down 6 cents at $62.80 a barrel as of 0751 GMT.<\/p>\n
US West Texas Intermediate (WTI) crude futures were at $57.50 a barrel, down 22 cents.<\/p>\n
Traders said prices fell after an American Petroleum Institute (API) report late on Tuesday that showed a 9.2 million barrel rise in gasoline stocks in the week ended December 1, and an increase of 4.3 million barrels in distillate inventories, which include motor diesel and heating oil.<\/p>\n
The perception that the higher fuel stocks pointed to weak demand outweighed a drop in crude inventories by 5.5 million barrels to 451.8 million barrels, traders said.<\/p>\n
Outside the United States, analysts said supply cuts by the Organization of the Petroleum Exporting Countries (OPEC), Russia and other producers – last week extended to all of next year – have helped lift Brent prices by more than 40 per cent since June, and more than 130 per cent since early 2016, when they hit their lowest level since 2003.<\/p>\n
With the supply cuts likely in place throughout 2018, analysts said crude prices were well supported.<\/p>\n
“Robust global demand and tight supplies should see Brent crude oil rise to $70 per barrel by mid-year (2018),” said Bank of America Merrill Lynch in its 2018 outlook.<\/p>\n
One factor that could undermine OPEC’s and Russia’s effort to cut supplies and prop up prices is US oil production, which has risen by 15 per cent since mid-2016 to 9.68 million barrels per day, close to levels of top producers Russia and Saudi Arabia.<\/p>\n
“US shale producers continue to win market share,” said Fawad Razaqzada, analyst at futures brokerage Forex.com.<\/p>\n
But weaker economic performance and a decline in refinery capacity utilisation in the first quarter could be a drag on oil demand and dampen prices, said Georgi Slavov, head of research at commodity broker Marex Spectron.<\/p>\n
“Demand remains firm, which is the main reason for us to still see oil at\/above $60 per barrel. This is likely to change as we approach 2018,” Slavov said in a note.<\/p>\n
“We are starting to pick up the weakness in the macro performance of key oil consuming regions. We are also starting to take note of the forthcoming January-February decline in refinery capacity utilisation,” he said.<\/p>\n
Despite this, some analysts said they expected refining margins to remain healthy into 2018.<\/p>\n
“Refining margins will surprise to the upside in 2018 … (because) we expect petroleum product demand growth of 1.3 million bpd on continued strength in the key light ends: gasoline and distillate,” Bernstein Research said in a note to clients on Wednesday.<\/p>\n","protected":false},"excerpt":{"rendered":"
Oil prices dipped on Wednesday, as refined product inventories in the United States rose in what the market interpreted as a sign of lacklustre demand. Brent crude futures, the international benchmark for oil prices, were down 6 cents at $62.80 a barrel as of 0751 GMT. US West Texas Intermediate (WTI) crude futures were at $57.50 a barrel, down 22 cents. Traders said prices fell after an American Petroleum Institute (API) report late on Tuesday that showed a 9.2 million barrel rise in gasoline stocks in the week ended December 1, and an increase of 4.3 million barrels in distillate […]<\/p>\n","protected":false},"author":40,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[133],"tags":[],"class_list":["post-140800","post","type-post","status-publish","format-standard","hentry","category-oil-gas"],"acf":[],"_links":{"self":[{"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/posts\/140800","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/users\/40"}],"replies":[{"embeddable":true,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/comments?post=140800"}],"version-history":[{"count":0,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/posts\/140800\/revisions"}],"wp:attachment":[{"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/media?parent=140800"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/categories?post=140800"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/tags?post=140800"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}