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Oil Futures Mixed as US Data Show Domestic Supplies Tumbled

September 27, 2017 at 16:59 by Andrew Moran

Oil prices are mixed in the middle of the trading week as new US government data discovered domestic supplies unexpectedly declined and gasoline stocks surged last week. Traders also turning their heads on reports that Nigerian crude exports could increase, impacting the international supply glut.

November West Texas Intermediate (WTI) crude futures rose $0.20, or 0.39%, to $52.08 per barrel at 16:40 GMT on Wednesday on the New York Mercantile Exchange. US crude prices have been holding steady above $50 for the last trading week, and is set to have a big third quarter.

Brent, the international benchmark for oil prices, is trading in red territory midweek. November Brent crude futures tumbled $0.60, or 1.03%, to $57.84 a barrel on London’s ICE Futures exchange. Brent is also poised to have an impressive third quarter with a jump of 22%.

On Monday, oil futures touched bull-market territory, thanks to a dramatic 20% rise from lows in June.

According to the US Energy Information Administration (EIA), US crude supplies declined by 1.8 million barrels for the week ending September 22. Domestic crude output soared 400,000 barrels per day (BPD) to 9.55 million bpd. Gasoline stockpiles climbed 1.1 million barrels, while distillate stockpiles dropped 800,000 barrels.

Despite US crude prices climbing higher, Brent crude has taken a hit. This is due to reports that Nigerian exports could experience a boost in the coming weeks, primarily because of higher output levels. Brent prices had been benefiting from Turkey’s repeated warnings that it would slash oil exports from the Kurdistan region of Iraq, helping benchmark prices top $60.

The Organization of the Petroleum Exporting Countries (OPEC) and 11 other non-OPEC members have agreed to freeze production levels at 1.8 million bpd until March 2018. It is being reported that OPEC may agree to extend the output limit, and may possibly expand the cap at its next official meeting.

OPEC has reached near full compliance, but the cuts to production have been offset by the US shale revolution and some cartel nations not sticking to the arrangement.

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