Futures Movers: Oil prices pare losses with U.S. supplies down a second week in a row

By

Markets/commodities reporter

Oil prices pared earlier losses on Wednesday after a U.S. government report showed a second consecutive weekly decline in domestic crude inventories.

The report eased some of the pressure on prices seen after the International Energy Agency lowered its growth forecast for 2018 global oil demand.

Brent crude, the global oil benchmark LCON8, -0.05%  shed 28 cents, or 0.4%, to $78.15 after touching its highest level since November 2014.

On the New York Mercantile Exchange, June West Texas Intermediate crude CLM8, -0.20%  was down 31 cents, or 0.4%, at $71 a barrel. It was trading lower at $70.73 before the supply data. July Brent crude LCON8, -0.05% the global benchmark, traded at $78.18 a barrel on ICE Futures Europe, down 25 cents, or 0.3%, after settling Tuesday at its highest since November 2014.

Energy traders have been cuing in on the spread between U.S. benchmark WTI and Brent, which stands at about $7, as a signal of demand for crude from Europe and Asian, market participants said.

Read: Here’s why U.S. oil is trading at its biggest discount to the global crude benchmark since 2015

The U.S. Energy Information Administration reported Wednesday that crude supplies declined by 1.4 million barrels for the week ended May 11. Analysts surveyed by S&P Global Platts had forecast a decline of 2.3 million barrels, but the American Petroleum Institute on Tuesday reported a rise of nearly 4.9 million barrels.

“Crude inventories mustered a draw, as refining activity increased and net imports remain suppressed amid rampant crude exports,” said Matt Smith, director of commodity research at ClipperData.

That said, Smith questioned the “strong export number,” because based on vessel-tracking and ClipperData’s export bill collection, he believes exports were below 2 million barrels a day last week.

The EIA showed a rise in last week’s crude-oil exports to 2.566 million barrels a day, from 1.877 million barrels a day a week earlier.

That was a record level for exports, and removed almost 18 million barrels of crude, according to Tom Kloza, global head of energy analysis at Oil Price Information Service.

Gasoline stockpiles, meanwhile fell by 3.8 million barrels for the week, while distillate stockpiles inched down by 100,000 barrels, according to the EIA. The S&P Global Platts survey forecast supply declines 2 million barrels for gasoline and 1.3 million barrels for distillates.

On Nymex, June gasoline RBM8, +0.55% rose 0.2% to $2.21 a gallon, while June heating HOM8, +0.01%  slipped by 0.4%, to $2.24 a gallon.

June natural gas NGM18, -0.56% lost 0.7%, at $2.817 per British thermal units, ahead of an EIA weekly update Thusday on supplies of the heating fuel.

Early Wednesday, a monthly report from the International Energy Agency said global oil demand growth for 2018 has been cut to 1.4 million barrels a day, compared with 1.5 million barrels a day previously. The reported said it expected a slowdown in demand growth in the second quarter due to high oil prices.

The IEA also reported that commercial oil inventories in industrialized economies have fell to 62.819 billion barrels in March from a month earlier—their lowest level in three years.

Crude trade continues to be influenced by U.S. plans to reimpose economic sanctions on Iran, following the U.S. withdrawal last week from the key 2015 multilateral nuclear pact with Iran.

Oil traders also looked ahead to the presidential election in Venezuela this weekend. CNBC reported that the U.S. may directly target Venezuela’s oil industry after what some countries consider to be a sham election. But an ongoing economic crisis in the South American country has cut into its oil production, with the IEA expecting Venezuela’s output to possibly fall by “several hundred thousand barrels a day” by the end of this year.

However, U.S. shale oil production is forecast to climb. A monthly report from the EIA on Monday said crude-oil production from seven major U.S. shale plays is expected to see a climb of 144,000 barrels a day in June to 7.178 million barrels a day. Separate EIA data showed that total U.S. crude production edged up by 20,000 barrels to 10.72 million barrels a day last week.

–Sarah McFarlane contributed to this report

Filed in: Top News Tags: 

You might like:

The Wall Street Journal: Google workers mulled manipulating search-engine results in wake of Trump’s travel ban The Wall Street Journal: Google workers mulled manipulating search-engine results in wake of Trump’s travel ban
The Wall Street Journal: South Korea’s finance minister has high hopes for new trade deal with U.S. The Wall Street Journal: South Korea’s finance minister has high hopes for new trade deal with U.S.
Market Extra: Far-right candidate leads Brazil’s polls as investors worry about reforms, ailing real Market Extra: Far-right candidate leads Brazil’s polls as investors worry about reforms, ailing real
The Wall Street Journal: Comcast, Fox’s battle for Sky to be decided at auction this weekend The Wall Street Journal: Comcast, Fox’s battle for Sky to be decided at auction this weekend
The Wall Street Journal: Michael Cohen has reportedly talked about Trump to Mueller investigators The Wall Street Journal: Michael Cohen has reportedly talked about Trump to Mueller investigators
The Wall Street Journal: Number of teens who vape has jumped 75% this year, new study finds The Wall Street Journal: Number of teens who vape has jumped 75% this year, new study finds
GOP congressman questions Tilray medical-cannabis imports to U.S. GOP congressman questions Tilray medical-cannabis imports to U.S.
Dow, S&P 500 records belie festering fear that China and the U.S. ‘are on a collision course’ Dow, S&P 500 records belie festering fear that China and the U.S. ‘are on a collision course’

Leave a Reply

Submit Comment
© 7586 Stock Investors News. All rights reserved. XHTML / CSS Valid.