Oil loses ground on supply increase


US crude and gasoline declines shrank less than forecasted
Chief Investment Office18 Apr 2019
Photo credit: AFP Photo


Oil lost ground after government data showed US crude and gasoline supplies shrinking less than forecast by an industry report.

Futures in New York closed down 0.5% Wednesday (17 April) after the Energy Information Administration (EIA) said American oil stockpiles shrank for the first time in four weeks. Gasoline stocks fell as well, but both declines were below American Petroleum Institute (API) estimates that had lifted the market earlier.

Oil has climbed more than 40% this year as the Organization of Petroleum Exporting Countries (OPEC) and its allies cut production and US sanctions on Iran and Venezuela further tightened supply. The curbs have been so successful they have spurred worries the cartel could be pushing crude prices too high, increasing risks of a backlash from US President Donald Trump.

West Texas Intermediate for May delivery fell 0.45% to USD63.76 a barrel on the New York Mercantile Exchange. Brent for June settlement lost 0.14% to USD71.62 a barrel on the London-based ICE Futures Europe exchange.

The EIA found US oil stockpiles fell by 1.4m barrels last week (ended 12 April). The figure may ease concerns about American production overwhelming the market but was also less than half what API had found. Gasoline inventories shrank by 1.17m barrels, the ninth straight weekly decline. Crude input at refineries declined.

While fears about the global economy have restrained oil’s rally, there have been recent signs that growth is holding up. China said Wednesday that its first-quarter gross domestic product rose 6.4% from a year earlier, beating the 6.3% median estimate in a Bloomberg survey. – Bloomberg News.

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