Oil Prices Slip On Build-Up Of US Crude Inventories
Oil prices crashed on Wednesday after industry data showed a larger-than-expected build-up in US crude stockpiles, but expectations for an easing of trade tensions between the United State and China capped losses.
Brent crude futures were at $62.73 a barrel down 23 cents, or 0.4 per cent, from their previous settlement after moving up 1.3 per cent at $62.96 a barrel, while the US West Texas Intermediate, WTI, crude futures fell 21 cents, or 0.4 per cent, from their last close to $57.05 per barrel. In the previous session, WTI settled 1.2 per cent higher at $57.23 a barrel.
US crude inventories rose by 4.3 million barrels in the week ended November 1 to 440.5 million barrels, according to data from the American Petroleum Institute, API, released on Tuesday. That was nearly triple analysts’ forecast for an increase of 1.5 million barrels.
However, hopes for a breakthrough on trade in talks between the United States and China, the world’s two biggest oil consumers, remained and kept price falls in check.
China is pushing US President Donald Trump to drop more tariffs imposed on Beijing as part of a ‘Phase One’ US-China trade deal, according to people familiar with the negotiations.
“Investors will continue to take cues from US-China trade talks,” ANZ Research said in a note.
Looking ahead, next year’s oil market outlook may have upside potential, Mohammad Barkindo, Secretary-General of the Organization of the Petroleum Exporting Countries, OPEC, said on Tuesday.
But in the next five years, OPEC would supply a diminishing amount of oil, squeezed by rising US shale output and other rival sources, according to the oil producer group’s 2019 World Oil Outlook, released on Tuesday.
The OPEC and its partners, including Russia, previously agreed to cut oil production by 1.2 million barrels per day (bpd) until March 2020. They will meet in early December to review output policy.