Oil Trims Losses as U.S. Crude Stocks Drop 3.4M Barrels Last Week

Investing.com – Oil prices pared losses on Wednesday, after data showed U.S. crude stockpiles dropped more than forecast last week.

U.S. West Texas Intermediate (WTI) were at $57.87 a barrel, down 12 cents, or about 0.2%, by 10:35AM ET (1535GMT). Prices were at around $57.78 prior to the release of the inventory data.

Meanwhile, futures, the benchmark for oil prices outside the U.S., dipped 10 cents, or around 0.2%, to $63.14 a barrel.

The U.S. Energy Information Administration said in its weekly report that crude oil inventories fell by in the week ended Nov. 24. That compared with analysts’ expectations for a decline of 2.3 million barrels, while the American Petroleum Institute late Tuesday reported a supply-gain of 1.8 million barrels.

Supplies at Cushing, Oklahoma, the key delivery point for Nymex crude, decreased by last week, the EIA said.

Total U.S. crude oil inventories stood at 453.7 million barrels as of last week, which the EIA considered to be at the upper half of the average range for this time of year.

U.S. crude oil imports averaged 7.3 million barrels per day last week, down by 544,000 barrels per day from the previous week.

The report also showed that gasoline inventories increased by , compared to expectations for a gain of 1.2 million barrels. For distillate inventories including diesel, the EIA reported a gain of .

Oil prices extended their decline into a second session on Tuesday as doubts over an extension to a production-cut deal at Thursday’s OPEC meeting weighed.

Oil ministers from the Organization of Petroleum Exporting Countries and other major producing countries will meet in Vienna on Thursday to decide whether to extend their current production agreement beyond a March 2018 deadline.

Most market analysts expect the oil cartel to extend output cuts for a further nine months until the end of next year, but the terms were so far unclear, as Russia has sent mixed signals about whether it will back the move.

In November last year, OPEC and 11 other non-OPEC producers, led by Russia, agreed to cut output by about 1.8 million barrels per day between January 1 and June 30. The agreement was extended in May of this year for a period of nine months until March 2018 in a bid to reduce global oil inventories and support oil prices.

The OPEC-led production cuts have been one of the key catalyst supporting the recent rally in oil prices amid expectations that rebalancing in oil markets are well underway. However, fears that rising U.S. output would dampen OPEC’s efforts to rid the market of excess supplies are prevented prices from rising much further, according to market participants.

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