Will Strong Crude Oil Prices Affect Coal Producers?

USA crude oil stockpiles edged higher last week but alongside large declines in product stockpiles, even as domestic United States oil output and imports jumped.

All told, total petroleum inventories dropped by 12.2 million barrels, the Energy Department said Wednesday.

Meanwhile, US stocks had their worst day in two months, with DJIA losing 100 points from yesterday's record peak.

Brent, the global benchmark, rose 11 cents, or 0.19%, to $58.44 a barrel on ICE Futures Europe. Analysts had expected a decrease of 2.6 million barrels.

Gasoline futures rose for a seventh straight day to 1.93 cents, or 1.13%, to $1.7348 a gallon, their highest settlement since September 1.

Oil eased on Wednesday but was still near a four-week high after top exporter Saudi Arabia said it was determined to end a supply glut that has been weighing on the market for three years. This suggested demand remained strong after the peak US driving season.

"Synchronized global growth, robust demand for oil, high compliance [with an OPEC deal] and geopolitical risks provide support [for crude oil prices]", Ole Hanson, the head of commodity strategy at Saxo Bank, said in an emailed market report.

The Organization of the Petroleum Exporting Countries, Russia and other producers have cut oil output by about 1.8 million barrels per day (bpd).

The figures also showed that US oil production rebounded to pre-hurricane levels, rising to more than 9.5 million barrels a day. The pact runs to March 2018, but they are considering extending it.

"The build in crude stocks was more than overshadowed by draws in excess of 5 million barrels for both gasoline and distillates", said Troy Vincent, oil analyst at ClipperData in Louisville, Kentucky.

"However, rising oil production in the US and persistently high exports from the country will be the key bearish factors".



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