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U.S. oil slips as stockpiles rise for seventh week

Published 24/02/2017, 12:11 pm
© Reuters.  U.S. oil slips as stockpiles rise for seventh week
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TOKYO, Feb 24 (Reuters) - U.S. oil prices fell on Friday after government data released late on Thursday showed stockpiles rose last week for a seventh straight week, although losses were muted as inventory growth was well below expectations.

U.S. West Texas Intermediate CLc1 fell 13 cents, or 0.2 percent, to $54.32 a barrel by 0048 GMT, having closed up 86 cents in the previous session.

Brent crude LCOc1 was trading down 13 cents, or 0.2 percent, at $56.45. The contract rose 74 cents in the previous session to settle at $56.58.

U.S. crude inventories USOILC=ECI rose by 564,000 barrels in the week to Feb. 17, up for a seventh week, although below analysts' expectations for an increase of 3.5 million barrels, the Energy Information Administration (EIA) said. EIA/S

Gasoline inventories fell far more than expected as refineries cut output, the EIA said.

Crude imports USOICI=ECI , however, slumped 1.4 million barrels per day, while exports rose 185,000 bpd to a record high of 1.2 million bpd, driven in part by surging exports to Asia in the wake of a deal by many non-U.S. oil producers to cut output. Organization of the Petroleum Exporting Countries and producers including Russia have pledged to cut production by around 1.8 million barrels per day (bpd) to tackle a global glut that has kept prices depressed since 2014.

On Thursday, sources told Reuters that the joint OPEC/non-OPEC technical committee reported an 86 percent compliance on the oil cuts in January. Earlier, sources reported over 90 percent compliance within OPEC.

While OPEC appears to be sticking to its deal, producers that were not part of the deal, particularly U.S. shale drillers, have increased output, driving the growth in inventories in the United States, the world's biggest oil consumer.

"Current oil prices are neither sustainable for OPEC or the industry," AB Bernstein said in a note on Friday. "As such, inventories will have to fall, which we expect will be clearer in the spring after the seasonal build."

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