Oil Struggles After Rise in US Output

By Justin Yang Features Dow Jones Newswires

Crude prices were steady Thursday, with the market pressured by increased U.S. production despite signs of a drawdown in stocks.

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Brent crude, the global oil benchmark, was up 0.1% to $49.75 a barrel on London's ICE Futures exchange. On the New York Mercantile Exchange, West Texas Intermediate futures were trading up 0.06% at $47.35 a barrel.

Data from the U.S. Energy Information Administration on Wednesday showed U.S. production rose by 32,000 barrels a day in the week ended July 14 to its highest level in two years.

Accelerating U.S. production continues to be a major threat to the ongoing effort from the Organization of the Petroleum Exporting Countries and its allies to drain a years-old global oil glut.

That, combined with increased Libyan oil production, is serving as a cap for oil prices Thursday, said Carsten Fritsch, a Commerzbank analyst.

Investors are waiting for the oil cartel to meet next Monday in St. Petersburg to see whether Nigeria and Libya, two member countries exempt from OPEC's production curtailment plan, will possibly be included.

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The effort led by OPEC to reduce global output by 2% has seen limited results this year as rising production from the U.S. has been helping offset the cuts.

Still, oil prices are finding support as more evidence of a gradual supply draw are emerging. Data from the U.S. Energy Information Administration showed U.S. stockpiles fell for a 13th week out of the past 15. Weekly decreases in gasoline and distillate stocks also surpassed estimates.

The data also showed crude oil imports from Saudi Arabia fell to 524,000 barrels a day in the week ended July 14, the lowest level since June 2010. That helps prices, signaling to the market that the cuts from OPEC are surfacing, said Warren Patterson, commodity strategist at ING Bank.

"Overall the data from the EIA was very positive and bullish,"Mr. Patterson said.

Nymex reformulated gasoline blendstock--the benchmark gasoline contract--was down 0.2%, at $1.61 a gallon. ICE gasoil changed hands at $461.00 a metric ton, up 1.1% from the previous settlement.

(END) Dow Jones Newswires

July 20, 2017 07:01 ET (11:01 GMT)