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Crude Oil Prices Drop In Asia After API Estimates, EIA Data Awaited

Crude down in Asia - Oil prices fell in Asia on Thursday as U.S. industry estimates showed a bearish and unexpected build in crude inventories and investor awaited official figures.

On the New York Mercantile Exchange crude futures for November delivery dropped 0.55% to $51.02 a barrel, while on London's Intercontinental Exchange, Brent declined 0.61% to $56.59 a barrel.

U.S. crude oil stocks rose a more-than-expected 3.097 million barrels at the end of last week, the American Petroleum Institute (API) said on Tuesday, while gasoline inventories fell by 1.575 million barrels and distillates gained 2.029 million barrels.

Supplies at the storage hub of Cushing, Oklahoma, rose by 1.216 million barrels.

Crude oil inventories weree seen down by 1.8 million barrels, distillates down by 2.375 million barrels and gasoline stocks expected to show a 1.025 million barrels decline.

The API estimates will be followed by official data on Thursday from the Energy Information Administration (EIA). The API and EIA figures often diverge.

Overnight, crude oil prices settled higher on Wednesday after Opec said demand for oil is set to increase in 2018 raising investor expectations that higher demand will rein in excess supplies.

In its monthly report, the Organization of the Petroleum Exporting Countries (Opec) indicated that market rebalancing will continue amid forecasts that global oil demand will rise by around 30,000 barrels a day for this year and 2018.

The upbeat forecast for oil demand growth, however, was offset by a rise in Opec production by 90,000 barrels a day, fueling concerns that Opec compliance with the deal to curb output is starting to wane.

In May, Opec and non-Opec members agreed to extend production cuts for a period of nine months until March 2018, but stuck to production cuts of 1.8 million bpd agreed in November last year.

Meanwhile in the U.S., the Energy Information Administration raised its crude-oil price forecasts for 2018 despite expectations of an increase in domestic production. For 2018, The EIA forecasts crude prices around $50.57, up 2% from the previous outlook and production to increase 0.8% to 9.92 million barrels a day.

Barclays (LON:BARC) (LON:BARC) revised upwards its outlook on Brent crude prices for the first quarter of 2018 by $5 to $56 a barrel, noting that the market has shifted from “build mode to draw mode”.

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