Crude Oil Falls Further On Massive API Inventories Build

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Crude Oil Falls Further On Massive API Inventories Build

Crude has climbed lately to a two-year high around $57 USA a barrel in trading in NY, although it is not seen making much larger gains due to rising U.S. output.

"Total commercial US crude oil inventories declined by 25 million barrels from the last week of July to the week ending November 3, but inventories in Cushing increased by 8.8 million barrels".

Brent crude oil was down 14 USA cents a barrel at US$61.73 by 1038 GMT.

While the crude build of 1.9 million barrels reported by the Energy Information Administration was more than forecast, it was not as big as the increase of 6.5 million barrels reported on Tuesday by industry group the American Petroleum Institute.

USA crude imports rose last week by 261,000 barrels per day.

Global benchmark Brent crude futures gained 0.2 percent to $62.04 per barrel, adding $0.15 more to its last close of $61.87.

"The biggest factor is USA oil production hit a new record this week", said Kyle Cooper, a consultant at ION Energy Group.

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Crude Oil Falls Further On Massive API Inventories Build

The threat of higher shale production kept a lid on oil prices for much of 2017, but investors have recently become more optimistic on the market.

United States crude inventories added 1.9 million more barrels in the week to November 10, which was clearly different from analysts' forecast of a 2.2 million barrels decrease.

This is potentially bearish for crude oil especially Brent. The S&P Global Platts survey forecast supply declines of 1 million barrels for gasoline and 2 million barrels for distillates.

Oil has eased after reaching a two-year high last week on signs of tightening supplies and speculation the Organization of Petroleum Exporting Countries and its allies will extend output curbs past the end of March.

"It is far too early to write the obituary of oil, as growth for trucks, aviation, petrochemicals, shipping and aviation keep pushing demand higher", said Fatih Birol, executive director of the Paris-based IEA. But prices were still on track to fall almost 2 percent this week, as fears of oversupply in the United States weighed after government data showed output hit a record 9.65 million bpd last week. That could mean world oil consumption may not breach 100 million bpd next year as many had expected.

Weaker seasonal demand should take a toll on oil prices, pushing the US market back toward $50 a barrel, said Michael Loewen, a strategist at Scotiabank. Refinery utilization rates rose by 1.4 percentage points.

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