Oil pulls back after big jump on US crude stock draw

There was, however, a notable drop in gasoline stocks, which were fell 4.2 million barrels, compared with analysts’ expectations for a 171,000-barrel drop.

Futures dropped 2.7 percent in NY, paring the weekly advance to less than 5 percent.

Many observers pointed to tropical storm Hermine as the reason behind the big drop. “You aren’t going to see a 14-million-barrel build next week, but it’s safe to say a build in the 6 to 8 million range is likely”.

Oil cartel Opec and non-Opec producers such as Russian Federation are expected to discuss the issue at informal talks in Algeria from September 26-28.

U.S. benchmark West Texas Intermediate for delivery in October slid US$1.74 to US$45.88 a barrel compared from Thursday. Total volume traded was 5% below the 100-day average.

The November contract for global crude benchmark Brent was down $1.12, or 2.2%, to $48.85 a barrel on the ICE Futures exchange in London. WTI crude plunged around 4% to $47.62 per barrel yesterday. It rose $1.84 to $49.82 a barrel, a 3.8 per cent gain, by 12:56 p.m. EDT (1656 GMT).

Key US oil spreads remained little changed after the EIA report. China raised its crude oil imports by 5.7% in August from a month earlier, while its August imports marked the first rise in almost two years.

Futures dropped 2.1 percent in NY, paring the weekly advance to 4.9 percent. “The stronger dollar tends to put pressure on commodity prices more generally”. Gulf Coast crude imports hit the lowest levels on record last week, data showed.

On the higher political level, President Vladimir Putin also met with the Saudi Deputy Crown Prince Mohammed bin Salman at the G-20 meeting and agreed they will monitor the markets.

Despite the larger-than-expected draw down, USA crude oil inventories are still at historically high levels for this time of the year. At 93.7% of capacity, the refinery utilization rate last week was at its highest level of the summer. Plants usually begin to cut back on operations in August as the peak-demand driving season comes to an end.

Algeria’s oil minister on Friday said two separate agreements could be required between OPEC and non-OPEC producers.

Oil firm executives gathered in Singapore this week made rosy projections that the market was due for rebalancing, but the analysts’ forecasts reveal an enduring skepticism that things will get much better soon.

The main obstacle to a freeze deal continues to be Iran, which insists on raising its production to reclaim lost market share after years of global sanctions ended this January.