Crude oil to trade in 3534-3662 range: Achiievers Equities

Gasoline stockpiles fell by 900,000 barrels and jet fuel dipped by 1.9 million barrels.

The enormous build comes just a day before the release of separate data from the US Energy Information Administration (EIA) on inventory levels on Wednesday.

While traditional oil exporters are fighting oversupply in attempt to boost the prices, the U.S.is intensifying its shale oil production.

The price for Brent crude oil was 0.5 percent below yesterday's close to $54.78 per barrel about a half hour before US markets opened.

US West Texas Intermediate (WTI) futures were up 18 cents at US$54,01 a barrel. In recent weeks, United States crude inventories rose 2.5 million barrels, while gasoline stockpiles jumped 1.2 million barrels.

Commercial crude inventories across the border rose by 13.8 million barrels in the week through February 3 to 508.6 million, compared with analysts' expectations for a 2.5-million-barrel increase. Distillate stocks are 6.1% higher than a year ago with gasoline inventories 0.2% higher.

The Organization of the Petroleum Exporting Countries agreed on November 30 to cut output by 1.2 million bpd to 32.5 million bpd for the first six months of 2017, in addition to 558,000 bpd of cuts agreed by non-members such as Russia, Oman and Mexico. Ten OPEC members obligated to reduce oil output under the agreement signed in 2016, achieved 91 percent of their required cuts in January, according to the S&P Global Platts survey.

The EIA said on Tuesday it expects USA crude production to grow by 100,000 bpd to 8.98 million barrels this year, 0.3 percent less than previously forecast, but expects production to jump by 550,000 bpd in 2018.

"We're still seeing the impact of elevated production from OPEC ahead of the cuts", Craig Bethune, a fund manager at Manulife Asset Management in Toronto who focuses on energy and natural resources investments, said by telephone.

Although this action does not have a direct effect on oil outputs, this issue could contribute to slower production of oil which could eventually decrease in oil output and could send oil prices to rise.

The EIA reported US stock piles surged 13.5 million barrels last week, roughly in line with yesterday's industry data from the American Petroleum Institute.

Latest News