Total liquid fuels inventories back to normal in US, OECD

Crude Oil Slides Despite Inventories Decline

Crude Oil Slides Despite Inventories Decline

Since the agreement took effect, global oil markets have tightened, which can be seen in the decline in crude oil and other liquids inventories following sustained increases in quarterly global liquid inventories from mid-2014 through most of 2016.

The president's comments boosted the dollar and sparked selling in dollar-denominated commodities, said John Kilduff, a partner at Again Capital Management.

US West Texas Intermediate crude gained 11 cents to stand at US$67.15 a barrel by 0702 GMT, bouncing off a session low of US$66.81 a barrel having fallen nearly 2% on Thursday.

The U.S. benchmark traded at a discount of more than $11 to Brent crude for the first time since March 2015.

U.S. West Texas Intermediate and international-benchmark Brent crude oil settled mixed last with WTI continuing its two-week price slide and Brent edging slightly higher. Saudi Arabia stayed within its quota and its production inched up to 10.00 million bpd because more crude oil was consumed domestically by power plants, according to sources in the Reuters survey.

The premium doubled in about a month as a lack of pipeline capacity in the United States traps much of the output inland. For the week, WTI was on track for a 1.9 percent fall, adding to last week's near 5 percent decline.

Refinery crude runs rose 527,000 barrels per day to 17.2 million bpd as utilization rates jumped 2.1 percentage points to 93.9 percent of total capacity, both the highest runs and rates since January, EIA data showed.

-Moody's Investors Service just blamed high oil prices in part for a 0.2 percentage-point cut in its outlook for India's 2018 GDP growth, and warned of the potential of falling consumption spending and rising inflation across the globe if current high prices are sustained.

"The weekly number suggesting USA production is really strong and continuing to rip higher", said Matt Smith, director of commodity research at ClipperData.

About 883,000 barrels per day (bpd) of US crude is expected to land at Asian ports in June, up from 769,000 bpd in May, which was the previous high for USA crude exports to Asia.

U.S. drillers added two oil rigs in the week to June 1, bringing the total to 861, the most since March 2015, General Electric Co's Baker Hughes energy services firm said yesterday.

"If you're going to take a long position here, you have to be betting on inventory draws and no political action created to lower crude prices", said Bill O'Grady, chief market strategist at Confluence Investment Management in St. Louis. Prices have dropped about 5 percent since Saudi Arabia and Russian Federation last week proposed to phase out supply curbs by OPEC and its allies, a decline compounded by fears over U.S. Brent recovered, however, when a Gulf source flagged that any rise in production would be gradual.

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