Unexpected rise in United States oil stockpiles steals the wind from Opec's sails

Muriel Colon
April 4, 2019

Oil prices rose for a fourth day on Wednesday, with support from OPEC-led supply cuts and US sanctions overshadowing an industry report showing an unexpected rise in USA inventories last week.

Analysts have turned cautiously optimistic on the oil market, a monthly Reuters poll showed on Friday, lifting their forecast for the average Brent price in 2019 for the first time in five months to $67.12. Crude oil processing remained lower than usual.

Brent crude rose 26 cents, or 0.4 per cent, to $69.27 a barrel by 0025 GMT, having earlier touched $69.29, a new high for 2019.

West Texas Intermediate for May delivery rose as much as 50 cents to US$62.09 a barrel on the New York Mercantile Exchange, the highest since November 8.

US West Texas Intermediate (WTI) futures rose 28 cents, or 0.5 per cent to $61.87 a barrel.

"The $70-a-barrel price level is within striking distance", said Norbert Ruecker, head of macro and commodity research at Julius Baer Group Ltd.in Zurich.

“The production cuts by OPEC+ are providing a nice backdrop here for higher prices and until we see USA production reassert itself, the easier move is higher for oil, ” said Edward Moya, senior market analyst at OANDA.

That was offset by Saudi Arabia reducing production to a four-year low of 9.82 million barrels a day.

(MENAFN - Baystreet.ca) The American Petroleum Institute (API) reported a build in crude oil inventory of 3.0 million barrels for the week ending March 29, coming in over analyst expectations of a 425,000-barrel draw.

Net U.S. crude imports rose last week by 386,000 bpd while exports dropped by 163,000 bpd to 2.7 million bpd.

Three of eight countries granted waivers by Washington to import oil from Iran have cut the imports to zero, a US official said on Tuesday, adding that improved global oil market conditions would help reduce Iranian crude exports further. Meanwhile, distillate stockpiles dropped by 2 million barrels.

According to EIA's data, USA crude oil refinery inputs averaged 15.8 million barrels per day last week, 18,000 barrels per day more than the previous week's average.

On the demand side, Chinese factory activity unexpectedly rose last month, at the fastest clip in eight months, providing another support to oil prices with signs that oil demand growth could hold resilient going forward.

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