United States crude stockpiles fall in latest week

Daniel Fowler
July 18, 2019

Brent crude futures were up $0.09 at $66.57 a barrel by 1333 GMT. They fell 1.1% on Wednesday.

Brent crude futures were down 82 cents at $63.53 a barrel and U.S West Texas Intermediate (WTI) crude futures fell 99 cents $56.63 a barrel.

Oil erased its gains after a mixed US government report showed a surprising drop in fuel demand last week, even as crude production flagged due to a storm in the Gulf of Mexico.

Late Tuesday, the API reported a smaller-than-expected crude oil inventory draw of 1.401 million barrels for the week-ending July 11, compared to analyst expectations of a 2.69-million barrel draw.

The "easing of tensions between the USA and Iran, mixed Chinese growth data and storm-hit operations getting back online are all pressuring oil prices downward", said Alfonso Esparza senior market analyst at OANDA.

Oil production in the Gulf of Mexico returning to normal following Hurricane Barry is also expected to limit price gains. Distillate inventories grew by 6.226 million barrels for the week, while inventories at Cushing fell by 1.115 million barrels.

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The dispute between the United States and Iran over Tehran's nuclear program have lent support to oil futures, given the potential for a price spike should the situation deteriorate. More than half of daily crude production in the Gulf of Mexico remained offline on Tuesday, the Bureau of Safety and Environmental Enforcement (BSEE) said, as most oil companies were re-staffing facilities to resume production.

USA officials say they are unsure whether an oil tanker towed into Iranian waters was seized by Iran or rescued after facing mechanical faults as the Iranian government asserts, sowing confusion at a time of high tension in the Gulf.

The upside remained capped somewhat after industry data showed a smaller-than-expected decline in US crude inventories.

Distillate stockpiles, which include diesel and heating oil, rose 5.7 million barrels, versus expectations for a 613,000-barrel increase, the EIA data showed.

The U.S. drilling regulator said 1.1 million barrels per day of oil, or 58% of the region's total, remained shut.

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