NEWS
Oil prices slipped on Wednesday from four-week highs after a surprising increase in crude inventories. However, the market was underpinned by statements from top exporter Saudi Arabia, which said it was determined to end a three-year supply glut. U.S. government data showed substantial draw downs in gasoline and distillate fuel inventories headed into the winter fuel season. That and an increase in U.S. refining output buoyed hopes for a draw in crude inventories in coming weeks.
U.S. West Texas Intermediate crude ended Wednesday’s session down 29 cents to $52.18, after closing at a six-month high in the previous session. Brent crude futures were up 2 cents at $58.35 a barrel by 2:24 p.m. ET (1824 GMT), having closed up 96 cents or 1.7 percent on Tuesday.
The Organization of the Petroleum Exporting Countries, Russia and other producers have cut oil output by about 1.8 million barrels per day (bpd). OPEC’s next meeting is on Nov. 7 in Vienna, Austria, when they will consider extending the deal. While other producers cut output, U.S. production rebounded to 9.5 million bpd in the latest week. U.S. crude exports have averaged 1.7 million barrels a day over the past four weeks, highest ever.
“Saudi Arabia’s determination to rebalance the market, together with ongoing geopolitical tensions in the Middle East, will remain supportive of oil prices,” said Abhishek Kumar, senior energy analyst at Interfax Energy’s Global Gas Analytics in London. “However, rising oil production in the US and persistently high exports from the country will be the key bearish factors.” Disruptions to exports from Iraq, OPEC’s second-largest producer, amid tensions between Baghdad and autonomous Iraqi Kurdistan have supported oil. Kurdish authorities on Wednesday offered to suspend their independence drive.
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