Oil ends down 2 percent as U.S. crude build offsets gasoline draw
- Wall St. gains across sectors ahead of Trump inauguration
- Walgreens Boots Alliance (WBA) Said to Face Antitrust Concern for Rite Aid (RAD) Fix - Bloomberg
- Bristol-Myers Squibb (BMY) Says It Won't Pursue Accelerated U.S. Regulatory Pathway for Opdivo Plus Yervoy in Lung Cancer
- Herbalife (HLF) Says SEC Requested Documents on Anti-Corruption Compliance in China; Reviewed with DoJ
- Investment Focus: History suggests Trump month will be stocks down, dollar up
A man stands close to the Cardon refinery, which belongs to the Venezuelan state oil company PDVSAn in Punto Fijo, Venezuela July 22, 2016. REUTERS/Carlos Jasso
Find out which companies are about to raise their dividend well before the news hits the Street with StreetInsider.com's Dividend Insider Elite. Sign-up for a FREE trial here.
By Barani Krishnan
NEW YORK (Reuters) - Oil prices fell around 2 percent on Wednesday after the second-biggest weekly draw in U.S. gasoline this summer was countered by an unseasonal build in crude stockpiles.
Adding to renewed worries about a global crude glut, top crude exporter Saudi Arabia told the Organization of the Petroleum Exporting Countries (OPEC) that the kingdom's output reached a record high of 10.7 million barrels per day in July.
U.S. crude inventories rose 1.1 million barrels in the week ended Aug. 5, the U.S. Energy Information Administration (EIA) reported, in a third consecutive weekly build that surprised the market. Analysts polled by Reuters had expected a 1.0 million-barrel crude draw instead.
"At this time of year, we should be drawing down in crude inventories, and we are still building," said Tariq Zahir, trader in crude oil spreads at Tyche Capital Advisors in New York.
U.S. West Texas Intermediate (WTI) crude futures
Brent crude futures
The EIA said gasoline stocks fell 2.8 million barrels last week in the second-biggest weekly draw for the fuel since mid-April. The draw, amid U.S. East Coast refinery runs hitting 2011 lows, exceeded expectations for a gasoline drawdown of 1.1 million barrels.
Even so, U.S. gasoline futures
"I'm surprised gasoline fell as much as it did today despite the good draw numbers," said Pete Donovan, broker at Liquidity Energy in New York. "But it's nearing the end of summer and the driving season, and focus is turning back to crude stockpiles."
WTI had its sharpest monthly fall in a year in July, dropping 14 percent, after runaway gasoline demand for the summer fell short of refiner production. Storage tanks worldwide are also nearly full with oil products while refiner profits in Singapore have hit two-year lows.
Some see oil prices rebounding, citing Venezuela's renewed efforts to get OPEC to cooperate with other oil producers on reducing output after a failed effort in April.
"The mere suggestion of OPEC working in the background on a price support initiative should be enough to hold the market in the $43-$45 levels in the near term," said Salvatore Recco, who helps oversee about $2 billion of client money, including in oil, at Gravity Investments in Denver.
(Additional reporting by Ahmad Ghaddar in LONDON and Henning Gloystein in SINGAPORE; Editing by Marguerita Choy and Jeffrey Hodgson)
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- UPDATE: Weekly Crude Inventory Increases by 2.3M Barrels, Says EIA
- Berlin: No reason to speculate about return to G8 format with Russia
- Venezuela 2016 inflation hits 800 percent, GDP shrinks 19 percent: document
Create E-mail Alert Related CategoriesCommodities, Reuters
Related EntitiesCrude Oil, OPEC
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!