TOKYO (Reuters) – Oil prices fell for a second day on Thursday after official data showed U.S. crude and gasoline stocks rose against expectations as production hit a record.
FILE PHOTO: Oil pump jacks at sunset near Midland, Texas, U.S., August 21, 2019. REUTERS/Jessica Lutz/File Photo
Brent crude futures were down 22 cents, or 0.3%, at $63.84 a barrel by 0735 GMT, having dropped 0.3% on Wednesday.
U.S. West Texas Intermediate crude fell 33 cents, or 0.6%, to $57.78, after falling 0.5% in the previous session.
Crude stockpiles in the United States swelled 1.6 million barrels last week as production rose to a record of 12.9 million barrels per day (bpd) and refinery runs slowed, the Energy Information Administration said. Analysts in a Reuters poll had forecast a drop of 418,000 barrels.
The United States is currently the largest consumer and producer of oil in the world.
More bearish was a 5.1 million-barrel rise in gasoline stocks, compared with forecasts for a 1.2 million-barrel gain.
“Stubbornly high U.S. crude inventories have seen oil prices ease in Asia today,” said Jeffrey Halley, senior market analyst at OANDA. But “dips … are likely to be limited for now, as the U.S. holiday mutes activity,” he added, referring to the U.S. Thanksgiving holiday.
Oil prices had risen this week on expectations that China and the United States, the world’s two biggest crude users, would soon sign a preliminary agreement, putting an end to their 16-month trade dispute.
Investors have also been focusing on next week’s meeting of the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, which have been withholding production to support prices.
“Traders will likely stay cautious before the coming OPEC meeting to ascertain for supply-side commitments from key producers in 2020,” said Benjamin Lu, analyst at Phillip Futures in Singapore.
OPEC and its allies, a group known as OPEC+, have agreed to cut output to bolster prices by 1.2 million barrels per day (bpd) through to March 2020. The group may extend the cuts at their meeting in Vienna on Dec. 5-6.
Forces based in eastern Libya said on Wednesday they had driven rival factions from the 70,000-bpd El Feel oilfield after attacking the area with air strikes, leading to production being halted and raising some worries about supply.
In the United States, energy services company Baker Hughes reported that U.S. oil drillers reduced the number of drilling rigs for a record 12th month in a row.
Drillers cut three oil rigs in the week to Nov. 27, bringing the count down to 668, the lowest since April 2017, Baker Hughes said in its report released a day early due to Thanksgiving.
(Graphic: U.S. petroleum inventories png, here)
Reporting by Aaron Sheldrick; Editing by Tom Hogue and Christian Schmollinger