Crude Oil Gains In Asia After API Estimates Offer Support

Investing.com – Crude oil prices gained in Asia on Wednesday as industry estimates of U.S. inventories showed a large that expected drop in crude, though products showed gains over expected declines.

On the New York Mercantile Exchange crude futures for November delivery rose 0.42% to $52.10 a barrel, while on London’s Intercontinental Exchange, added 0.29% to $58.28 a barrel.

Crude oil inventories fell by 7.130 million barrels, the American Petroleum Institute (API) said oin Tuesday, more than expected as gasoline stocks rose by 1.94 million barrels and distillates gained 1.64 million barrels missing expectations of declines.

The oil storage hub at Cushing, Oklahoma, showed a drop of 151,000 barrels.

The API estimates will be followed by official data on Wednesday from the Energy Information Administration (EIA).

Crude oil inventories were seen down by 4.750 million barrels, while gasoline stocks are seen down by 1.0 million barrels and distillates off by 1.5 million barrels. The API and EIA figures often diverge.

Overnight, prices settled flat on Tuesday as expectations of a ramp up in U.S. production weighed on sentiment while easing conflict in Northern Iraq between Iraqi and Kurdish forces lessened concerns over potential supply disruptions in the region.

Crude oil prices came under pressure on renewed oversupply concerns following data indicating that U.S. producers will increase output.

A monthly report from the Energy Information Administration released Monday showed expectations for a rise of 81,000 barrels a day to 6.12 million barrels a day in shale oil production from seven key U.S. shale regions in November.

The recent uptick in crude prices above $50 a barrel is widely viewed as an incentive for shale producers as it’s the price level at which they can ramp up output.

Also weighing on the crude prices was a fall in geopolitical tensions in Northern Iraq as the threat of ongoing fighting between Iraqi and Kurdish forces eased after Kurdish forces pulled out of disputed areas in region.

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