Crude Oil Prices Remain Higher But Upside Seen Limited

Investing.com – Crude oil prices remained higher on Thursday, but gains were expected to remain limited by the previous session’s disappointing U.S. inventories data and ongoing concerns over U.S. output.

The U.S. West Texas Intermediate January contract was up 35 cents or about 0.61% at $56.33 a barrel by 09:50 a.m. ET (13:50 GMT), just off a three-week low of $55.83 hit overnight.

Elsewhere, for February delivery on the ICE Futures Exchange in London was up 48 cents or about 0.82% at $61.71 a barrel, after hitting a two-week trough of $61.13 on Wednesday.

Oil prices came under pressure after data from the U.S. Energy Information Administration on Wednesday showed a big jump in U.S. fuel inventories while domestic production hit another weekly record.

The latest EIA weekly data showed U.S. gasoline stocks rose by , much higher than expectations.

U.S. crude oil production rose by 25,000 barrels per day (bpd) last week to 9.71 million bpd, bringing output close to levels of top producers Russia and Saudi Arabia.

The report also showed that U.S. crude oil inventories fell by to 448.1 million, putting stocks below seasonal levels in 2015 and 2016.

Fears that rising U.S. output would dampen OPEC’s efforts to rid the market of excess supplies are weighed on sentiment, according to market participants.
The producer group, along with some non-OPEC members led by Russia, agreed last week to extend current oil output cuts for a further nine months until the end of 2018.

The deal to cut oil output by 1.8 million barrels a day (bpd) was adopted last winter by OPEC, Russia and nine other global producers. The agreement was due to end in March 2018, having already been extended once.

Elsewhere, were up 0.45% at $1.675 a gallon, while lost 4.21% to $2.800 per million British thermal units.

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