Oil prices fall as U.S. crude inventories rise further
Reuters
Published Feb 24, 2017 04:43AM ET
Oil prices fall as U.S. crude inventories rise further
By Karolin Schaps
LONDON (Reuters) - Oil prices fell on Friday after U.S. crude inventories rose for a seventh week, showing the market is still struggling to ease oversupply despite many producers' efforts to rein in output.
U.S. crude stocks
The continued rise in U.S. inventories comes as members of the Organization of the Petroleum Exporting Countries and other producers have cut output.
Their joint compliance with a production-reduction deal reached at the end of last year was around 86 percent in January, according to OPEC sources quoting results from a technical committee meeting held this week.
The United States, which is not part of the deal, continues to ramp up production. Analysts at ING said they expected U.S. output to keep rising as prices remained strong enough to encourage further drilling.
Benchmark Brent crude oil (LCOc1) was down 48 cents at $56.10 a barrel at 0908 GMT, while U.S. West Texas Intermediate (CLc1) traded at $54.06 a barrel, down 39 cents.
"Prices continue to retreat on repeated failure to rise above the upper end of their trading ranges and yesterday's inventory data also weighs," said Carsten Fritsch, analyst at Commerzbank (DE:CBKG) in Frankfurt.
However, signs have started to emerge that traders are depleting storage levels, beefed up while oil prices were weak.
In the United States, traders are draining the priciest storage tanks as strengthening markets make it unprofitable to store for future sale and cuts in global production open export opportunities.
"Current oil prices are neither sustainable for OPEC or the industry," AB Bernstein said in a note. "As such, inventories will have to fall, which we expect will be clearer in the spring after the seasonal build."
In Asia, traders are selling oil held in tankers anchored off Malaysia, Singapore and Indonesia.
More than 12 million barrels of oil has been taken out of storage in tankers berthed off Southeast Asian countries this month, shipping data in Thomson Reuters Eikon shows.
Get The News You Want
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.