Economy

API: Supersized Crude Build Sends Oil Prices Down

API: Supersized Crude Build Sends Oil Prices Down”

Oil prices rose slightly on Friday as concern over an economic slowdown in China, the world's biggest oil consumer, was countered by bullish signals from both the Chinese and USA refining sectors. Comments from a high ranking government official on a U.S. -China trade deal are also helping to underpin prices.

As a result, Brent rose 49 cents to settle at $59.91 per barrel, and West Texas Intermediate gained 57 cents to settle at $53.93 per barrel.

The system transports the Forties crude oil stream that makes the biggest contribution to the Brent benchmark. Traders are saying that anything that isn't a hard Brexit is likely to be positive for crude oil prices.

Adding to the downward pressure, US crude oil stockpiles surged last week by 9.3 million barrels as refinery output dropped to a two-year low, while gasoline and distillate fuel inventories decreased, the Energy Information Administration said on Thursday.

OPEC and its allies, including Russian Federation, have agreed to limit oil output by 1.2 million barrels per day (bpd) until March 2020.

After the present stock move, the net draw for the year is 15.27 million barrels for the 42-week detailing period up until this point, utilizing API information.

Wednesday evening, the American Petroleum Institute (API) reported that crude inventories increased by 4.13 barrels in the week ending October 10.

And for those who worry about reduced demand for gasoline specifically and crude in general, the International Energy Agency revealed on Thursday that the number of SUVs operating around the world grew from 35 million in 2010 to over 200 million previous year, a 60 percent increase. The consensus forecast is for a rise of 2.88 million barrels but the API numbers suggest that a larger rise is possible.

Oil prices were trading up on Wednesday prior to the data release after rebounding from persistent grim economic growth outlooks, the most recent of which came from the International Monetary Fund, which said that it sees global economic growth slipping to just 3% this year-the slowest rate of growth since the 2008 financial crisis. They are calling the chart pattern constructive.

If confirmed by the government data, the build-up would be the biggest USA inventory swell since February, 2017, Innes said.



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