World oil prices edge down over expected climb in U.S. output

World oil prices edge down over expected climb in U.S. output

Oil was trading lower Wednesday morning, down 9 cents to $52.32 at about 9:50 NY.

USA crude futures were up 43 cents at $50.87 a barrel.

But bloated inventories weighed.

Last week, the API reported a 1.3-million-barrel draw for crude oil inventories for week ending April 7, while the EIA reported a 2.2-million-barrel draw.

Official U.S. oil data is expected to be published later on Wednesday by the Energy Information Administration (EIA). In London, June Brent crude LCOM7, -0.84% on the ICE exchange also fell 53 cents, or 1%, to $55.36 a barrel.

"We are still in a very well-supplied crude market in the U.S. The gasoline build was a bit of a surprise but makes sense given that this is the time of year refinery runs increase", Wellington, Florida-based Energy Analytics Group LLC director, Thomas Finlon, told Bloomberg by telephone.

Arabiya TV quoted Saudi Energy Minister Khalid al-Falih as saying on April 17 that the level of compliance among OPEC and non-OPEC oil producers with a global deal to cut output is very good.

In China, signs emerged that refiners were using record crude imports to produce more fuel such as gasoline and diesel than the country can absorb.

Despite a surge in United States shale production, the average cost for a barrel of Brent crude may rise by $10 by the end of the year, according to U.S. investment banking multinational Citigroup, as cited by Bloomberg.

Any increase in output in the United States, now the world's third-biggest oil producer, will likely put pressure on the Organization of the Petroleum Exporting Countries (OPEC) - which agreed to curb output at the end of a year ago - to cut production further.

Crude oil prices have moved in a narrow band between $50 per barrel and $55 per barrel for several sessions, masking some of the volatility from emerging geopolitical strains that followed a mid-April military strike on Syrian targets by the United States.

Many U.S. sanctions against Iran were lifted in late 2015, allowing Tehran to boost its crude oil exports from 2016 which added to the global glut.

Looking at the latest price reactions, one might conclude that the only reason for the previous price rise was the expectation of further production cuts on the part of OPEC", Commerzbank (Xetra: "CBK100 - news) strategist Carsten Fritch said.

Traders may be standing still in early trading to wait for official US data on supply and data before pushing the markets in either direction.



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