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Oil falls on bulging U.S. crude inventories, record global supplies

Published 26/04/2017, 11:12 am
© Reuters.  Oil falls on bulging U.S. crude inventories, record global supplies
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* US crude stocks swell by 897,000 barrels to 532.5 million - API

* Record 50 million bpd being shipped on tankers in May - Eikon

* Brent crude oil curve values in 2017: http://reut.rs/2oJZerY

By Henning Gloystein

SINGAPORE, April 26 (Reuters) - Oil prices resumed their downward trend on Wednesday as data showed a rise in U.S. crude inventories and record supplies in the rest of the world cast doubt on OPEC's ability to cut supplies and tighten the market.

U.S. West Texas Intermediate (WTI) crude oil futures CLc1 were trading at $49.32 per barrel at 0052 GMT, down 24 cents, or 0.5 percent from their last close, after gaining 0.7 percent in the previous session. WTI has fallen for seven of the past eight sessions.

Traders said that a report late on Tuesday by the American Petroleum Institute (API) that U.S. crude oil inventories rose by 897,000 barrels in the week to April 21 to 532.5 million barrels had weighed on WTI. crude futures LCOc1 , the international benchmark for oil prices, were at $51.88 per barrel, down 22 cents, or 0.4 percent, from their last close. Brent is around 8.5 percent below its April peak.

The Organization of the Petroleum Exporting Countries (OPEC) and a group other producers including Russia, but excluding the United States, have pledged to cut output by 1.8 million barrels per day (bpd) during the first half of the year in order to rein in years of oversupply and prop up prices.

Yet prices have largely slumped this year as U.S. inventories remained brimming and global fuel supplies set new records, despite the pledges to cut output.

The average value of the Brent crude oil forward curve 0#LCO: has fallen by more than $5 per barrel since the start of the year, when an OPEC-led supply cut officially started, implying that traders have doubts about the effect of the cutbacks on supplies. slump in Brent is a result of record crude oil volumes being shipped around the world, despite the cuts.

Shipping data in Thomson Reuters Eikon shows that 50 million bpd have been booked for shipment on tankers this month, up more than 10 percent since December last year.

Despite the recent price declines and bulging supplies, some analysts said there were signs of a tighter market ahead.

"Supply of crude is likely to decline over next three weeks (to mid-May), which will support the market and create the conditions for a rebound in prices," said Georgi Slavov, head of energy, ferrous metals and shipping research at commodities brokerage Marex Spectron, adding that demand was also slowly picking up into May.

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Murky oil inventory picture leaves market grappling for clarity

COLUMN-OPEC heads for failure as crude shipments overwhelm cut rhetoric

CHART-Brent crude curves values in 2017

http://reut.rs/2oJZerY

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