Oil mounts numerously month lows as U.S. stockpiles collapse
TOKYO: Oil prices climbed on Thursday after U.S. crude and gasoline stockpiles down, but panics over whether OPEC-led output cuts would be able to constrain in a three-year excess continued to haul.
The market largely dismissed comments overnight from Iran’s oil minister that members of the Organization of Petroleum Exporting Countries (OPEC) are considering deeper cuts in production.
Brent crude futures were 4 cents higher at $44.86 a barrel at 0219 GMT, after falling 2.6 percent in the previous session to their lowest since November.
On Wednesday, they settled down at $42.53, after touching their shortest intraday level since August 2016. U.S. crude futures were up 6 cents at $42.59 a barrel.
OPEC and other producers agreed to cut output by 1.8 million barrels per day from January for six months, subsequently extended for a further nine months.
Since reaching to the highest, in late February, crude dropped around 20 percent, with only brief rallies, completely erasing gains at the end of the year in the wake of the initial OPEC-led production cut.
With production soaring in Nigeria and Libya, countries exempt from the deal, and output gushing in the United States, which was not part of the agreement, many bulls appear to have thrown in the towel.
ANZ said in a research note, “Oil has ‘now fallen into ‘bear’ territory,’ OPEC (and allies) may have pared back production, but that’s being offset by relentless drilling in the U.S. and more output in Libya.”
The U.S. Energy Information Administration said on Wednesday that a bigger-than-expected cut in U.S. crude stock reported overnight is hardly shifting the dial negligible by 56,000 barrels per day.
Gasoline stocks fell 578,000 barrels as compared to analyst expectations for a seasonally unusual 443,000-barrel gain, which had been seen as brief in the market.
Stocks of the motor fuel had also mounted unexpectedly by 2.1 million barrels in the previous week.