Oil reverses its concerns US inventories grow

NEW YORK (Reuters) – Oil prices were mixed on Monday, down from a recovery after the numbers suggest that US crude inventories could rise, which would weigh on the market.

According to traders, Bloomberg's weekly data suggests that US oil stocks are rising, which contradicts a previous report from the energy information provider, Genscape, which predicts a drop in inventories.

"It has been a special Monday morning that the Bloomberg or Genscape figures can kill a rally," said Bob Yawger, director of futures at Mizuho in New York.

Futures contracts on US crude dropped 20 cents to $ 67.55 a barrel at 12:32 pm. EDT (1632 GMT). Brent crude oil rose 30 cents to $ 77.13 a barrel after peaking at $ 77.92 a barrel.

Earlier in the session, crude oil strengthened as the growth of US drilling slowed and investors anticipated a drop in supply when new US sanctions against Iranian crude exports would open from November.

"The low number of rigs has allowed us to progress," said Phil Flynn, an analyst at Price Futures Group in Chicago. "In the end, there are also storms that could impact stocks for a while."

US drillers cut two oil platforms last week, bringing the total to 860, Baker Hughes said Friday.

The growth in the number of oil drilling rigs in the United States has stagnated since May, due to increased well productivity, but also bottlenecks and infrastructure constraints.

"A scenario of rising oil prices is based on the decline in Iranian exports because of US sanctions, the growth of American shale production, the instability of production in countries like Libya and Venezuela, and commercial war the next 6 to 9 months, "said Harry Tchilinguirian, oil strategist at the French bank BNP Paribas.

"We are seeing Brent trading over $ 80 in this scenario," he told the Reuters Global Oil Forum.

Outside the United States, Iran's crude oil exports decline before the November deadline for the implementation of the new US sanctions.

Although many Iranian oil importers have said they oppose sanctions, few seem to be willing to challenge Washington.

"Governments can talk harshly," said energy consulting firm FGE. "They can say that they will resist Trump and / or lobby for derogations. But in general, the companies we're talking about … say they will not take it, said FGE. "US financial penalties and the loss of shipping insurance scare everyone.

While Washington is pressuring countries to reduce their imports from Iran, it is also urging other producers to increase their production to keep prices up.

US Secretary of Energy Rick Perry will meet with his counterparts from Saudi Arabia and Russia respectively on Monday and Thursday, while the Trump administration is encouraging the world's largest producers and exporters to maintain production.

Investors worry about the impact of the oil dispute between the United States and other major economies on oil demand, as well as the weakness of emerging markets.

"Trade wars, and especially rising interest rates, can create difficulties for emerging markets that drive growth in oil demand," FGE said.

Despite this, the consulting firm estimated that the likelihood of a decline in oil prices was relatively low, as the Organization of the Petroleum Exporting Countries would likely adjust production to stabilize prices.