Oil extends losses after API reports huge U.S. crude build

Tue Feb 7, 2017 4:59pm EST
 
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By Jessica Resnick-Ault

NEW YORK (Reuters) - Oil prices that tumbled more than 1 percent Tuesday fell further after settlement, pressured by growing crude stockpiles in the United States as evidence of a burgeoning revival in U.S. shale production could complicate efforts by OPEC and other producers to reduce a supply glut.

Brent crude LCOc1 settled down 67 cents, or 1.2 percent, at $55.05 a barrel, while U.S. crude CLc1 ended 84 cents, or 1.6 percent, lower at $52.17.

Brent dropped to $54.70 and U.S. crude to $51.75 by 4:39 p.m. Eastern (2139 GMT) in post-settlement trading after weekly data from trade association the American Petroleum Institute estimated that U.S. crude stockpiles had surged 14.2 million barrels last week.

If U.S. Energy Information Administration data due on Wednesday at 10:30 a.m. confirms the stockpile surge, it will be the largest build since October.

Analysts have forecast that U.S. crude stockpiles rose 2.5 million barrels last week - a fifth straight weekly build - while gasoline inventories grew 1.1 million barrels - a sixth consecutive weekly build.

U.S. gasoline stocks are rising much faster than normal at the start of the year, threatening to leave refiners struggling to clear an overhang of motor fuel later in the year.

U.S. gasoline futures RBc1 fell to settle at $1.4875 a gallon, after dropping earlier in the session below the 200 day moving average on a continuous chart, a bearish technical signal.

"It's a supply-driven setback ... We are within 2 million barrels of the record in U.S. gasoline stocks that we saw last February," said Tony Headrick, energy markets analyst at CHS Hedging. "A strong build in inventory reports could weigh on gasoline in a seasonal time frame where gasoline demand is weak."   Continued...

 
FILE PHOTO: An employee pumps petrol into a car at a petrol station in Hanoi, Vietnam December 20, 2016. REUTERS/Kham/File Photo