Oil prices edge lower after USA fuel inventories build

Crude Oil Price Triangle Breakdown Could Give Pause to USD  CAD

US crude oil stockpiles drop amid Barry, fuel posts large builds

U.S West Texas Intermediate (WTI) crude futures fell 40 cents to $57.22 a barrel.

Oil fell almost 3% a barrel on Thursday, weighed down by weakness in US equities markets and an expectation that crude output would rise in the Gulf of Mexico following last week's hurricane in the region.

Brent crude futures were down 69 United States cents, or 1.1 per cent, to settle at $US63.66 a barrel.

A larger than expected crude inventory drawdown offset by large builds in refined product inventories led to crude prices on Wednesday falling over 1 percent, extending a 3 percent-plus drop in prices in the previous session. September Brent fell $1.36 to $62.30 on the ICE Futures Europe Exchange. The global benchmark hit a session high of $66.84 earlier in the day.

Crude inventories fell by 1.4 million barrels in the week to July 12 to 460 million, industry group the American Petroleum Institute (API) said on Tuesday.

But gasoline stocks USOILG=ECI rose 3.6 million barrels, compared with analysts' expectations in a Reuters poll for a 925,000-barrel drop.

In its latest Short-Term Energy Outlook released last week, EIA said the USA crude oil and petroleum product net imports will average 0.6 million b/d in 2019, down from an average of 2.3 million b/d in 2018.

The smaller-than-expected decline suggested production shut-ins caused by Hurricane Barry late last week had little impact on inventories.

Distillate stockpiles, which include diesel and heating oil, rose 5.7 million barrels, versus expectations for a 613,000-barrel increase, the EIA data showed. Still, the possibility of crude flows being disrupted from the Middle East remains in focus after Iran's Foreign Minister Mohammad Javad Zarif said his country was capable of shutting crucial oil-shipping route the Strait of Hormuz, but is unwilling to do so.

More than half of daily crude production in the Gulf of Mexico remained offline Tuesday, the Bureau of Safety and Environmental Enforcement (BSEE) reported, as most oil companies were re-staffing facilities to resume production.

However, Iran later denied it was willing to negotiate over its ballistic missile program, contradicting a claim by U.S. Secretary of State Mike Pompeo, and appearing to undercut Trump's statement.

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