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US Crude Stocks Dip, But Gasoline Inventories Rise

21 April 2017

Crude oil storage tanks are seen from above at the Cushing oil hub, in Cushing, Oklahoma, March 24, 2016.

The WTI crude oil price and the product spot prices were not available due to the market closure on Friday.

"We are still in a very well-supplied crude market in the U.S. The gasoline build was a bit of a surprise but makes sense given that this is the time of year refinery runs increase", Wellington, Florida-based Energy Analytics Group LLC director, Thomas Finlon, told Bloomberg by telephone.

Still, Saudi energy minister Khalid al-Falih on Thursday said a preliminary agreement to continue cuts for another three or six months is within reach and could be approved at OPEC's next meeting on May 25.

Oil fell to a two-week low on Wednesday, after a surprising build in USA gasoline inventories and a rise in domestic crude output that is partially offsetting cutbacks by other countries trying to reduce a global glut. The May contract expires at settlement, and the more actively traded June contract recently gained 10 cents, or 0.2%, to $50.95 a barrel.

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Brent crude futures were at $53.31 per barrel at 0108 GMT, up 38 cents, or 0.72 percent, from their last close.

"The U.S. market perhaps doesn't believe in the oil market balance that OPEC would have us believe", said Hans van Cleef, senior energy economist with ABN AMRO.

USA gasoline stocks posted a counter-seasonal build of 1.5 million barrels, because of rising refining activity.

The fall in oil prices was, however, given some support by a report indicating that there was a decline in output in Saudi Arabia.

USA 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.

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"The market sentiment appears to be that the increase in USA shale production outweighs the OPEC action and the market is keeping the loss we had yesterday", he said.

"At 532.3 million barrels, USA crude oil inventories are near the upper limit of the average range for this time of year".

Slight production reported Wednesday also reinforced widespread anxiety that USA shale producers are becoming more capable in churning out oil at a lower price, analysts say.

"Five of the last trading days we've been lower", he said.

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