Oil prices fall 2 percent on rise in U.S. crude stocks

Wed Dec 14, 2016 10:12am EST
 
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By Devika Krishna Kumar and Ahmad Ghaddar

NEW YORK/LONDON (Reuters) - Oil prices fell about 2 percent on Wednesday as glut worries resurfaced after a reported rise in U.S. crude inventories and as OPEC signaled a growing crude surplus next year unless production cuts by the world's top exporters are implemented.

Data from the American Petroleum Institute late on Tuesday showed U.S. crude inventories rose by 4.7 million barrels in the week to Dec. 9, compared with analysts' expectations for a 1.6-million-barrel decline.

"The crude supply surge was led by another whopping 3.2-million-barrel increase in Cushing, Oklahoma," said Phil Flynn, analyst at Chicago-based brokerage Price Futures Group.

"The builds in Cushing in recent weeks have kept supply in the U.S. from falling harder and this week broke the recent strings of decline."

Official inventory data from the U.S. Energy Information Administration will be released at 10:30 a.m. EST (1530 GMT).

Brent futures for February delivery were down 79 cents to $54.93 a barrel, a 1.4 percent loss, by 9:48 a.m. EST (1448 GMT). U.S. crude fell 99 cents to $51.99 per barrel, a 1.9 percent loss.

The Organization of the Petroleum Exporting Countries on Wednesday signaled a growing oil supply surplus next year unless members implement their deal to curb output from record levels and outside producers also deliver on cutback pledges made over the weekend.

In a monthly report, OPEC said that without cuts the 2017 overhang would reach 1.24 million bpd, about 300,000 bpd higher than the forecast in its previous report.   Continued...

 
An oil well pump jack is seen at an oil field supply yard near Denver, Colorado, U.S., February 2, 2015.   REUTERS/Rick Wilking