Oil pulls back in post-settlement trade as U.S. stockpiles rise
By Jessica Resnick-Ault
NEW YORK (Reuters) - Oil prices pared gains after the settlement Tuesday, as evidence of surging U.S. crude oil stockpiles underscored concerns that shale production might limit the effectiveness of an OPEC-led effort to cut global output.
Brent crude LCOc1 traded at $55.73 a barrel at 4:39 p.m. Eastern, off the settlement of $55.97 a barrel, which was up 38 cents but well off the session high of $56.46 a barrel. U.S. light crude CLc1 traded at $52.94 a barrel following the inventory report by a trade group, after settling up 27 cents at $53.20.
After settlement, the American Petroleum Institute (API) said U.S. crude inventories rose 9.9 million barrels in the week to Feb. 10, far exceeding analysts' expectations for an increase of 3.5 million barrels. Gasoline and diesel stockpiles also rose, the API's weekly report said.
The U.S. government is scheduled to release its weekly data on stockpiles Wednesday morning.
On Monday, both benchmarks fell 2 percent. Both are near the middle of $5-per-barrel trading ranges seen since early December.
The Organization of the Petroleum Exporting Countries and other exporters including Russia have agreed to cut crude output by almost 1.8 million barrels per day (bpd) during the first half of 2017. The market has largely priced in these production cuts OPEC and other producers agreed to in November, said Tariq Zahir, managing member of Tyche Capital in New York.
"It would take either a supply outage or serious cuts to move it," he said. "The first month, obviously, OPEC is going to do the best it can, but after that, let's see what the second and third month bring."
Meanwhile, U.S. crude output is up 6.5 percent since mid-2016 to 8.98 million bpd, its highest since April last year. Continued...