Oil slips after U.S. crude stocks build to record high

Wed Mar 1, 2017 4:49pm EST
 
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By Jessica Resnick-Ault

NEW YORK (Reuters) - Oil prices ended slightly lower on Wednesday as record high U.S. crude supplies tempered expectations that the market will rebalance as evidence emerges that OPEC producers are complying with an agreement to cut production.

Crude stockpiles in the United States, the world's top oil consumer, rose 1.5 million barrels last week, less than forecast, but touching a record at 520.2 million barrels after eight straight weekly builds.[EIA/S]

The consecutive increases have fueled worries that demand growth may not be sufficient to soak up the global oil glut despite a deal by major oil producers to cut output during the first half of the year.

U.S. West Texas Intermediate (WTI) futures for April delivery CLc1 settled at $53.83 a barrel, down 18 cents or 0.3 percent. May Brent crude futures LCOc1 dropped 15 cents, or 0.3 percent, to $56.36 a barrel.

"The EIA stats don't offer much in the way of surprises this week," said David Thompson, executive vice-president at Powerhouse, an energy-specialized commodities broker in Washington.

"Lack of weather-generated demand for heating oil will be offset in coming weeks by agricultural demand, but with refineries coming back into service, the market looks capable of meeting any increased demand."

Despite the reaction to the data, oil remained locked within a tight trading range as some investors took heart from strict OPEC compliance with its pledge to cut output.

The Organization of the Petroleum Exporting Countries reduced its oil output for a second month in February, a Reuters survey found, showing the exporter group has boosted already strong compliance to around 94 percent.   Continued...

 
Chevron Corp's refinery is shown in Richmond, California August 7, 2012.  REUTERS/Robert Galbraith/File Photo