Oil slips despite large US inventory drawdown

Oil futures tilted lower in American trade even as the dollar index plumbed 37-month lows, following a basket of data from China, the world's largest energy importer, and the US, the world's largest consumer, including the EIA report that showed a large inventory drawdown for the ninth week in a row. 

As of 05:058 GMT, US West Texas Intermediate fell 0.09% to $64.01 a barrel from the opening of $64.07, while Brent futures due on March 15 shed 0.29% to $69.33 a barrel from the opening of $69.53, as the dollar index dropped 0.39% to 90.55 from the opening of 90.90.

Earlier data from China showed the seasonally-adjusted reading for fourth-quarter GDP growth at 1.6%, down from 1.8% in the third quarter, and missing expectations of 1.7%. 

On a yearly basis, China's GDP growth steadied at 6.8% in the fourth quarter, besting forecasts of 6.7%, while retail sales slowed  down to 9.4% in December, as industrial output accelerated to 6.2% from 6.1%. 

Earlier US data showed building permits steadied at an annualized 1.30 million units in December, same as November, and beating expectations of 1.29 million. 

US housing starts fell to an annualized 1.19 million units in December from 1.30 million in November, missing projections of 1.28 million units. 

US unemployment claims fell to 220 thousand in the week ending January 13, the lowest since March 1973, down from the previous reading's 261K, beating expectations of 250K. 

The Philadelphia Fed Business Outlook Survey, also called the Philadelphia Fed Manufacturing Index, dipped in January to 22.2 from 26.2 in December, missing forecasts of 24.9. 

More pertinently, the Energy Information Administration released its report on US crude stocks, showing a drawdown of 6.9 million barrels in the week ending January 12, adding to a 4.9M decline in the previous reading, while analysts expected a 1.4M drawdown, with total stocks now falling to 412.7 million barrels, remaining within the medium range on average in this time of year. 

Otherwise, gasoline stocks in the world's largest energy gobbler rose 3.6 million barrels, while distillate stocks, including heating fuel, fell 3.9 million barrels. 

OPEC released its monthly report earlier, where it detailed an increase in output by 42 thousand bpd in December, with more than quarter of this coming from Saudi Arabia, while global output rose 0.4 million bpd last month. 

OPEC said that global demand growth in 2017 was revised to show an increase of 40 thousand bpd, while maintaining their forecasts for 2018 at 98.51 million bpd and increases projections for growth of supplies outside OPEC by 160 thousand bpd in 2018 to 1.15 million bpd, mostly from the US and Canada. 

Kuwait oil minister Bakheet Al-Rashidi said on Wednesday that OPEC and other producers don't plan for early exit from the global deal to cut output by 1.8 million bpd until late 2018, asserting that it's scheduled to discuss compliance rates in the ministerial meeting on January 21, pointing to an excellent rate of 125% in December compared to 122% in November, and a rate of 106% overall in 2017. 

Al-Rashidi projected global crude demand to grow by 1.5 to 1.6 million bpd in 2018, adding that the global market is gradually regaining its balance and its expected for the output deal to hold until market reach full balance. 

On Tuesday, Russian energy minister Alexander Novak asserted the importance of complying with the deal to cut global output by 1.8 million bpd, noting that the global market hasn't achieved balance yet. 

Iraqi oil minister Jabbar Alluaibi said earlier this week that it's not acceptable to talk about amendments to the global  output deal until the markets reaches appropriate balance, while from the US, Baker Hughes reported a rise of 10 in the US oil rig count last week to a total of 752, the highest since the week ending December 8.