Crude prices slightly up on positive EIA data

“EIA expects the oil market to be relatively balanced in 2017 and 2018”, the agency said.

Meanwhile, U.S. West Texas Intermediate (WTI) crude for March deliveries was trading at $52.40/Bbl at the same time, up 23 cents or 0.44%.

Brent dropped to $54.70 and US crude to $51.75 by 4:39 p.m.

Oil prices rose slightly on Wednesday as investors covered short positions after a rise in US crude inventories was not as massive as many had feared, while gasoline futures jumped 4 per cent after a surprise decline in inventories of the fuel.

The fall in gasoline stocks suggested US consumption was stronger than expected, and may be healthy enough to support prices at time when most fuel oil markets are very well stocked.

“The EIA estimated crude oil stocks at the Gulf Coast ballooned by 10.9 million barrels, the biggest weekly increase at the U.S. Gulf Coast since August 2008”, Seaport Global Securities Macro Strategist Richard Hastings. First indications of compliance to that deal showed members cut production by 900,000 barrels a day (bpd) in January, according to Petro-Logistics, which tracks Opec supply.

“It’s a supply-driven setback”.

The Energy Information Administration reported a build of 13.8 million barrels in US oil inventories, representing the fifth consecutive weekly growth. “Some of it is a drop in exports, but another part is consumer response to higher gasoline prices”.

The resulting reduced supplies have also boosted the price of Middle East crude grades, and increased the spread between WTI and Brent.

OPEC’s production cuts have put a floor under oil prices, at least for now. With freight data showing a decline in vessel demand in January, this means arrival to the USA should slow down by early March.

The forecast of the energy statistics provider put downward pressures on oil prices and strengthened worries that global crude markets will remain oversupplied despite OPEC-led efforts to cut output.

Societe Generale oil analyst Michael Wittner said US shale oil output was recovering faster than expected.

Away from the oil market, precious metals headed into the realm of a marginal correction follow three sessions in positive territory as trader indulged in profit-taking. “The U.S. should be invited into the dialogue, the essence of the current events should be explained to them…”