Oil prices extend losses amid USA inventory data

Oil prices extend losses amid USA inventory data”

Oil has slid back toward $50/bbl in NY after entering a bull market last week. After settling Monday at the lowest level in more than week, it's holding ground between a low of $50.22 and a high of $50.73. Underlying optimism surrounding supply and demand dynamics was also tempered by expectations of a seasonal dip in demand as the USA driving season comes to a close. Over the last month, crude oil imports averaged over 7.1 million barrels per day, 10.7% below the same four-week period a year ago.

“The market may well discover it has been asleep at the wheel and far too relaxed about shale keeping a ceiling on prices forever, ” said Ben Luckock, a senior executive at Trafigura, the world's third-biggest independent oil trader.

As with the price of gold, oil is valued in dollars.

The statement also stated that production interruption of oil-exporting Countries organization (OPEC) could not help balance supply-demand in global market in near term. Turkey has not carried out the threat, analysts said. The industry group said crude inventories fell 4.1 million barrels in the week to September 29 to 465.4 million, compared with analysts' expectations for a decrease of 756,000 barrels.

US crude inventories fell by 4.08 million barrels last week after an unexpected draw of 0.76 million barrels the previous week, according to the latest American Petroleum Institute (API) inventory data for the week ending September 29. The average daily production rate for 2017 was revised downward from 9.35 to 9.25 million barrels per day. It was the biggest third-quarter increase since 2004.

USA crude inventories probably fell by 500,000 bbl last week, according to the median estimate in a Bloomberg survey. The global benchmark crude traded at a $4.90 premium to December WTI. The euro was down 0.38 percent against the dollar, trading at $1.1767. A stronger USA currency reduces the appeal of dollar-denominated raw materials as an investment.

Futures traded in a 51 cent-range in NY. "This market was really over-bought. But when you go forward, I would rather call it normalization".

Unprecedented flooding from the Category 4 storm that slammed into the state's coast last week, sending gasoline prices surging as oil refineries shut, may also set a record for rainfall in the contiguous USA, the weather service said Tuesday.

Nigeria agreed in July to support OPEC's production cap but only after its crude output reaches 1.8 million barrels per day.

Libya's Sharara oilfield resumed production Wednesday after being closed by armed forces Sunday.

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