Published: Mon, October 15, 2018
Markets | By Otis Pena

United States inventories of crude oil, gasoline increase

United States inventories of crude oil, gasoline increase

West Texas Intermediate crude for November delivery advanced 37 cents to end the session at $71.34 a barrel on the New York Mercantile Exchange. This decision was made to put more supply into the world oil market in order to tame the cost of crude.

Output, which includes crude oil, natural gas liquids, biofuels and refinery processing gains, was 2.3 million barrels above the same period a year ago and 1.3 million barrels a day higher than the second quarter.

Increases in OPEC crude oil production to offset declines in Iran and Venezuela have resulted in declining OPEC spare crude oil production capacity, said the report.

However, according to EIA, recent price increases indicate that oil market participants have concerns about the ability of Saudi Arabia, other OPEC members, and Russian Federation to continue to offset expected further production declines in Iran and in Venezuela.

Oil climbed to a four-year high above $85 a barrel in London last week on concern that looming US sanctions on Iranian crude exports will leave markets short of supply later this year.

"The decline may deepen significantly ahead of US sanctions - and subsequently as final cargoes are delivered", said the IEA, which advises major oil consumers on energy policy.

"Expensive energy is back, with oil, gas and coal trading at multi-year highs, and it poses a threat to economic growth", particularly for emerging economies, it warned.

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"We still estimate oil demand growing at 1.2 million to 1.5 million barrels per day for this year, and see the risk of a slowdown in 2019 if trade tension escalates", ANZ Research analysts said in a report. USA crude added 45 cents to $71.42.

In U.S. oil markets, a decline in commercial crude inventories provided WTI with stronger support than Brent. Both global demand and supply are close to hitting 100 million barrels a day for the first time.

The world is pumping out more oil and other petroleum liquids than ever before.

The IEA welcomes this boost to supply.

According to a report released by the American Petroleum Institute on Wednesday evening, US crude inventories climbed by 9.7 million barrels to 410.7 million last week.

"The weaker outlook has gotten a raised profile in the market, but there's potential for a real supply crunch toward the end of this year", said John Kilduff, a partner at Again Capital Management in NY.

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