Crude oil futures add to gains after surprising fall in U.S. inventories
ecPulse
2014-08-20 15:54PM UTC
U.S. crude oil futures maintained their gains on Wednesday just before the expiry of the September contract as oil inventories in the U.S. saw a strong fall. Brent rebounded from a 14-month low. The U.S. benchmark crude oil, also known as West Texas Intermediate or WTI, has been pressured by growing supplies of light-sweet oil from the North American shale boom, hitting a 7-month low of $94.26 on Tuesday. WTI futures for September delivery climbed 0.81% or 77 cents to $95.25 a barrel on Wednesday as investors retained short positions ahead of the contract’s expiry. Its premium over the contract for October delivery at one stage hit more than $3 a barrel, the largest price difference between the front and second month contracts since 2009. The U.S. Energy Information Administration said U.S. crude stocks fell by 4.5 million barrels last week, a much larger fall than anticipated, though stocks in the U.S. crude oil delivery hub of Cushing, Oklahoma, rose by 1.76 million barrels. Gasoline stocks rose 585,000 barrels against expectations for a drop while distillate stocks fell 960,000 barrels, slightly more than forecast. Brent crude for delivery in October was up 22 cents at $101.78 a barrel by 11:50 a.m. ET. The contract fell to $101.07 on Tuesday, its lowest since June 26, 2013. The more actively-traded October rose 69 cents to $93.55, with its discount to Brent around $9, the largest since June. Traders said Brent gained as they saw the 12% fall might be overdone. The international benchmark has fallen by more than $13 a barrel in the last two months as rising supplies of light-sweet crude created a surplus in the Atlantic basin. Fears that violence in Iraq would slash output from OPEC`s second largest producer have also not materialized. Also, Libya said on Tuesday that total oil production had risen to 562,000 barrels per day (bpd) from lows of barely 100,000 bpd earlier this year despite fighting between rival militias, though still well down on pre-blockade levels of near 1.4 million bpd.
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