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Oil Rallies as US Fuel Stockpiles Offset Surprise Weekly Rise in Crude Stocks

November 8, 2017 at 17:52 by Andrew Moran

Oil futures have pared their early losses and are now rallying midweek. After investors found that US fuel stockpiles offset the surprise weekly increase in crude stocks, oil prices surged more than 1%.

December West Texas Intermediate (WTI) futures rose $0.58, or 1.01%, to $57.78 per barrel at 16:36 GMT on Wednesday on the New York Mercantile Exchange. On Monday, US crude futures settled at their best levels since June 2015.

Brent, the international benchmark for oil prices, is also climbing higher in the middle of the trading week. January Brent crude futures jumped $0.93, or 1.46%, to $64.62 a barrel on London’s ICE Futures exchange.

According to the US Energy Information Administration (EIA), domestic crude supplies soared by 2.2 million barrels, while US crude output inched higher by 67,000 barrels per day (bpd) to 9.62 million bpd. Gasoline stockpiles declined by 3.3 million barrels, while distillate stockpiles tumbled 3.4 million barrels.

The US shale revolution continues, but oil production from the Organization of the Petroleum Exporting Countries (OPEC) lowered by 90,000 bpd in October. OPEC officials said there were “sharp declines” in Iraq and Nigeria, and there were “slight falls” in Algeria, Iran, Qatar, and Venezuela.

OPEC members will be holding an official meeting in Vienna on November 30. OPEC and other oil-rich nations are expected to agree to expand the output deal by an extra nine months until the end of 2018. They want to continue decreasing international crude supplies, an objective that has been troubled by the rising output levels by the US, also known as “Saudi America.”

Industry experts say that, despite the hiccups in recent months, OPEC is generally pleased that oil prices have stabilized at the imperative $50 threshold. Year-to-date, US crude prices have advanced more than 1%, while Brent crude prices have gone up close to 10%.

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