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Oil Falls on First Increase in US Crude Supplies in 11 Weeks

January 31, 2018 at 18:06 by Andrew Moran

Oil prices are tumbling midweek as the US government reported the first increase in domestic crude supplies in nearly three months. Oil futures are looking to pare their intraday losses towards the end of the trading day.

March West Texas Intermediate (WTI) crude futures dipped $0.10, or 0.16%, to $64.40 per barrel at 16:47 GMT on Wednesday on the New York Mercantile Exchange. US crude prices had a tremendous month as they advanced nearly 7% in January.

Brent, the international benchmark for oil prices, is also in the red in the middle of the trading week. March Brent crude futures slipped $0.14, or 0.20%, to $68.88 a barrel on London’s ICE Futures exchange. Brent prices also had a terrific month, rising more than 3% in January.

According to the US Energy Information Administration (EIA), US crude supplies climbed 6.8 million barrels for the week ending January 26, while total domestic oil production rose 41,000 barrels per day (bpd) to 9.919 million bpd. Gasoline stockpiles declined by two million barrels, while distillate stockpiles slid 1.9 million barrels.

With bitter cold temperatures battering many parts of the US, including in the south, analysts note that the market may be attributing winter weather to oil’s substantial increase. Amid reducing refinery runs and jump in demand, there is a draw for gasoline and distillates.

Last week, the US oil rig count increased by 12 to 759, the highest number of oil rigs since September.

Gasoline prices are trying to rally on Wednesday as February gasoline futures rose $0.004, or 0.21%, to $1.899 per gallon. In January, gasoline prices advanced more than 6%. Meanwhile, February heating oil futures slid $0.009, or 0.46%, to $2.062 per gallon – they were flat in January.

Natural gas plunged on strong output volumes and a modest weather outlook. March natural gas futures plummeted $0.218, or 6.73%, to $2.98 per million British thermal units (btu). Natural gas had a commendable month, rising 2.48% in January.

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