Oil pauses as US stocks fall, but Saudi output under close scrutiny

Oil prices rose on Wednesday after another close to yesterday's low, with gains following an unexpected inventory cut in US data late Tuesday.

Prices went up even as one report indicated that oil production in Saudi Arabia had climbed to a record close to 11 million barrels a day this month.

Lily: That's why the drop in oil prices is now a net drag on the US economy.

The American Petroleum Institute announced on Tuesday night that US crude supplies had dropped by about 1.5 million barrels for the week ended Nov. 16, sources said, an unexpected drop. API data showed that gasoline supplies increased by 706,000 barrels while distillate stocks fell by 1.8 million barrels, sources said.

The Energy Information Administration, which will release its own weekly numbers on Wednesday morning, has so far announced an increase in the supply of crude oil in each of the last eight weeks. On average, analysts polled by the Wall Street Journal expect the EIA to report an increase of 1.9 million barrels of crude oil. They expect a reduction in supply of 400,000 barrels of gasoline and 2.3 million barrels of distillates.

In advance of this report, January West Texas Intermediate Intermediate

CLF9, + 2.06%

increased by $ 1.05 or close to 2% to $ 54.48 per barrel. It was Tuesday at $ 53.43 on the New York Mercantile Exchange, the lowest amount of contracts entered into last month since October 26, 2017, according to Dow Jones Market Data.

"The market has started to rebound to leave the initial support at $ 52.75 [for WTI]said Richard Perry, an analyst at Hantec Markets. "API stocks have shown an unexpected decline in crude oil inventories, which will now focus on current EIA stocks. However, any rebound will now face significant resistance from $ 54 million in overhead costs instead of $ 58.00. "

January Brent Global Benchmark

LCOF9, + 1.87%

increased by $ 1.17, or 1.9%, to $ 63.70 per barrel. His arrival at $ 62.53 on Tuesday was the lowest since February.

WTI oil and Brent oil earlier this month fell into a bear market, defined as a drop of at least 20%, after peaking at nearly four years in early October.

Lily: Deadly cross forms in US oil, highlighting derailment of crude prices

As for Saudi Arabia, the increase in production is a stronger response to the demand than usual customers who are preparing for a supply disruption in Iran, said Bloomberg, citing Industry leaders who follow the evolution of Saudi production. Figures have already been reported by the International Oil Daily trade publication.

Riyadh pumped about 10.8 to 10.9 million barrels of oil a day, the Bloomberg report said. On some days, more than 11 million barrels a day were being supplied to the market by reducing domestic and foreign stocks, he added.

The Trump administration has decided to grant waivers to major buyers of Iranian crude following the adoption of US sanctions against the Islamic Republic that had fueled the selling pressure in the global oil market. Sanctions had been planned to prevent the bulk of Iranian oil from entering the market.

At the same time, major US, Russian and Saudi producers are pumping crude to record levels, resulting in significantly higher supply than world demand, last week announced a monthly update from the International Atomic Energy Agency. energy.

OPEC and its allies said earlier this month that they could adopt a joint reduction in production. Such an initiative would come just months after the group decided to increase production after more than a year of slowing down. OPEC reached an initial deal to cut production at next month's meeting, but has yet to agree on the amount, according to Reuters, citing comments by OPEC Governor Ahmed al -Kaabi, Al Bayan newspaper.

Lily: Saudis to capitulate on oil as US stocks rise – analysts

Stock market volatility, including a dip that overturned key negative averages for the year, has heightened worries about the world's thirst for oil, even as energy markets are trying to deal with the situation. over-supply. Groups, including OPEC, have reduced their growth prospects for oil demand for this year and next year.

At the same time, the US report on natural gas supply will be released Wednesday at noon, Eastern time, a day earlier than usual because of Thursday's Thanksgiving holiday.

December natural gas

NGZ18, + 2.28%

rose 4.1% to $ 4.71 per million British thermal units after a weather-driven rally boosted prices by nearly 15% last week, reaching its highest level ever four years.

December Essence

RBZ8, + 1.21%

increased by 1.1% to $ 1.513 per gallon, while December heating oil

HOZ8, + 0.92%

earned 1.1% to $ 2.012 per gallon.

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