This Article is From Dec 18, 2019

Oil Eases From 3-Month High on Report of Surprise Crude Build

Kriti Gupta, Sheela Tobben
Markets
Dec 18, 2019 05:02 am IST
- Published On Dec 18, 2019 05:01 am IST
- Last Updated On Dec 18, 2019 05:02 am IST

Read Time: 3 mins

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(Bloomberg) -- Oil eased gains after an industry report showed surprise builds in U.S. crude and fuel supplies, stoking demand concerns.

Futures edged lower after touching $61 a barrel for the first time in three months. The American Petroleum Institute reported a 4.71 million-barrel rise in crude inventories last week, countering analysts expectations for a draw. U.S. gasoline supplies rose 5.6 million barrels, the industry group said -- more than double what analysts polled by Bloomberg were anticipating.

“That was ugly data -- big builds in crude and gasoline,” said Michael Loewen, director of commodity strategy at Scotiabank in Toronto.

Seasonally, gasoline stocks are already at multi-year highs. If the Energy Information Administration confirms the API data on Wednesday, the build gasoline would be the largest since January. The API also reported a nearly 4 million-barrel increase in distillate inventories.

Oil futures ended Tuesday's session just 6 cents shy of the $61 mark, buoyed by rebounding U.S. factory production and progress between world's two largest economies on trade. The factory data and imminent trade agreement followed deeper-than-expected output cuts agreed by OPEC+ earlier this month, which Citigroup Inc. said will help keep a floor under crude prices.

West Texas Intermediate for January delivery rose 33 cents to $60.54 a barrel on the New York Mercantile Exchange at 4:59 p.m. The futures have advanced 10% since the end of November and are on track for the biggest monthly gain since January.

Brent for February settlement climbed 50 cents to $65.84 a barrel on the London-based ICE Futures Europe Exchange. The global benchmark crude traded at a $5.36 premium to WTI for the same month.

Other oil-market
Gasoline futures rose 1.4% to $1.6857 a gallon. Enforcement of Iran sanctions is being strengthened by the Trump administration with a plan to increase pressure on global shippers, Chinese state-owned enterprises and exporters of raw materials used in metal production. Libya's Waha Oil Co. restored output to 220,000 barrels a day and expects volumes to reach 300,000 a day later on Tuesday as improving weather allows the re-opening of export terminals. The United Arab Emirates, a vital Middle East shipping hub, will initially take a flexible approach to ships that breach new fuel regulations when they enter into force on Jan. 1, Federal Transport Authority Chairman Abdullah Al Nuaimi said in an interview.

Other oil-market

Gasoline futures rose 1.4% to $1.6857 a gallon.
Enforcement of Iran sanctions is being strengthened by the Trump administration with a plan to increase pressure on global shippers, Chinese state-owned enterprises and exporters of raw materials used in metal production.
Libya's Waha Oil Co. restored output to 220,000 barrels a day and expects volumes to reach 300,000 a day later on Tuesday as improving weather allows the re-opening of export terminals.
The United Arab Emirates, a vital Middle East shipping hub, will initially take a flexible approach to ships that breach new fuel regulations when they enter into force on Jan. 1, Federal Transport Authority Chairman Abdullah Al Nuaimi said in an interview.

To contact the reporters on this story: Kriti Gupta in New York at kgupta129@bloomberg.net;Sheela Tobben in New York at vtobben@bloomberg.net

To contact the editors responsible for this story: David Marino at dmarino4@bloomberg.net, Catherine Traywick, Mike Jeffers

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