US crude stocks fell last week as refineries hiked output, but gasoline supplies, which are already seasonally high, surprisingly increased, the Energy Information Administration said on Wednesday. Stocks have dropped sharply in the last several weeks and have fallen below levels seen at this time a year ago, but are still higher than where inventories have been in this decade.
Thirteen members of the Organisation of the Petroleum Exporting Countries (OPEC) and 11 non-OPEC members agreed to cut production by about 1.8 million barrels a day to prop up oil prices in December past year.
According to the Saudi Press Agency, Saudi Aramco planned to shut its 126,000-bpd crude oil refinery in Riyadh for planned maintenance for 80 days beginning on March 1. Brent crude settled down 3.6 percent, or $1.96 a barrel, to $52.93.U.S. crude stocks fell 1 million barrels in the latest week, the U.S. Energy Information Administration said, a smaller draw than expected. United States output, almost 55% of which comes from its seven major shale plays, averaged 9.25 million b/d in the week ended April 14, up almost half a million barrels a day versus the end of 2016, and around 820,000 b/d higher than the recent trough of July 2016, according to the latest EIA data.
Gasoline futures recently gained 0.6% to $1.6684 a gallon and diesel futures gained 0.2% to $1.584 8 a gallon. Andrew Lipow, president of Lipow Oil Associates in Houston, said some in the market were concerned about the rapid recovery in shale production."Perhaps the amount coming out of the ground might be more than we anticipate", he said.
"They drop production, we add production, and so at end of the day it's ugly", said Robert Yawger, energy futures strategist at Mizuho Americas.U.S. production rose to 9.252 million barrels a day in the latest week, highest since August 2015.
Oil prices are on pace for their biggest daily percentage decline since early March, and US crude oil production is expected to rise in both 2017 and 2018.
"Saudi's done a good job of managing the rhetoric", said Michael Hiley, a trader at LPS Futures LLC.
Crude stocks at the Cushing, Oklahoma, delivery hub fell by 778,000 barrels, EIA said. Off-topic, inappropriate or insulting comments will be removed.