Crude oil futures fell Wednesday, extending a more than 3% drop in prices durting Tuesday’s session, after U.S. government data showed large builds in refined product stockpiles, Kallanish Energy reports.
Brent crude futures fell 74 cents, to $63.61 a barrel, while U.S. West Texas Intermediate crude dropped 84 cents, to $56.78/Bbl. Both benchmarks shed more than 3% Tuesday.
While data Wednesday from the Energy Information Administration showed a larger-than-expected drawdown in crude inventories last week, large builds in refined product inventories kept prices lower, analysts said.
U.S. crude inventories fell 3.11 million barrels (Mmbbl), EIA data showed, more than analysts’ forecasts for a decrease of 2.7 Mmbbl. (See story elsewhere in this issue.)
Gasoline stocks rose 3.6 Mmbbl, compared with analysts’ expectations in a Reuters poll for a 925,000-Bbl drop. Distillate stockpiles grew 5.7 Mmbbl, much more than expectations for a 613,000-Bbl increase, EIA data showed.
Some of the EIA data was affected by Tropical Storm Barry, which came ashore on Saturday in central Louisiana as a Category 1 hurricane.
More than half of daily crude production in the Gulf of Mexico remained offline Tuesday, the Bureau of Safety and Environmental Enforcement (BSEE) reported, as most oil companies were re-staffing facilities to resume production.
The U.S. drilling regulator said 1.1 million barrels per day of oil, or 58% of the region’s total, remained shut.
Oil prices slumped Tuesday on increased hopes for a return of Iranian crude to the global oil market after President Trump said progress had been made with Tehran, signaling tensions could ease in the Middle East.
However, Iran later denied it was willing to negotiate over its ballistic missile program, contradicting a claim by U.S. Secretary of State Mike Pompeo, and appearing to undercut Trump’s statement.
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