Since the start of October, Saudi oil exports to the US have been 3.2 million barrels below shipments from Iraq. NY time on the London-based ICE Futures Europe exchange.
U.S. West Texas Intermediate crude oil (WTI) ended the session up $1.26, or 2.4 percent, at $53.90 after reaching a session peak of $53.98 a barrel, the highest since early March.
"This is likely what's continuing to weigh on the crude market at present", Michael Loewen, a commodities strategist at Scotiabank in Toronto. said in reference to the increase in supplies from USA oil fields.
OPEC and some major producers outside the cartel, including Russian Federation, first agreed late past year to cap their production at around 1.8 million barrels a day lower than peak October 2016 levels, with the aim of alleviating global oversupply and boosting prices. OPEC is said to be working on an exit strategy in an effort to reassure investors that the group will manage a controlled release of supplies to avoid a new glut when the curbs eventually expire. The price for Brent crude oil was down 0.26 percent to trade at $58.29 per barrel at 9:15 a.m. EDT. Total volume traded was about 9 percent below the 100-day average.
Overnight, crude oil prices settled lower on Wednesday as rising crude supplies and a surge in USA production offset data showing gasoline supplies fell more-than-expected. "Initially, it was thought to be related to the hurricane, but to me it's becoming a little more structural".
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U.S. crude production rose by 1.1 million bpd to 9.5 million bpd in the week ended October 20, according to U.S. Energy Information Administration (EIA) data.
Gasoline stockpiles dropped by 5.5 million barrels for the week, while distillate stockpiles fell 5.2 million barrels, according to the EIA.
"What is interesting is that the pop in WTI futures moved above the September 28 high", said David Thompson, executive vice president at Powerhouse, an energy-specialized commodities broker in Washington.
Global inventories remain above the five-year average with U.S. crude adding to existing stockpiles. "If you have strong products demand, that means refineries are going to buy more crude oil to create those products". That puts USA supply around 9.5 million barrels a day.
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