Oil futures were down in Asian trade Friday, after a volatile overnight session that saw prices spike due to sizable declines in U.S. oil and gas inventories, but only to see levels retreat almost all the way back to unchanged territory near the end of the U.S. session.
Crude levels in U.S. storage fell by 6.3 million barrels in the week ended Friday, the U.S. Energy Information Administration said Thursday, which was almost three times the expectations of a 2.5 million-barrel decrease from analysts surveyed by The Wall Street Journal.
Nonetheless, the gains were offset by ongoing concerns that global supplies aren't falling quickly enough, despite cuts led by the Organization of Petroleum Exporting Countries.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in August recently traded down 1.3% at $44.94 a barrel in the Globex electronic session. September Brent, on London's ICE Futures exchange, fell 1.3% to $47.50.
Analysts say a reversal of a week-and-a-half oil price rally, which Wednesday's decline kicked off, looked set to continue for the near term. Globally, bearish dynamics remain in play as global inventories remain above five-year averages, with increased production from countries like the U.S. and Libya offsetting the effects of the OPEC-led cuts.
While the overnight fall in oil inventories was "quite impressive", markets are concerned that agile U.S. producers are increasing production, says Michael McCarthy, chief markets strategist CMC Markets.
Data from the EIA also showed U.S. production increasing to 9.3 million barrels per day last week, up by 88,000 barrels per day from the week before. Production was up nearly 11% from a year ago and nearly back at its 10-month high.
Some of the overnight gains were also caused by a weakening dollar, which firmed up slightly in Asian hours, Mr. McCarthy added.
Refined-product prices were also broadly lower on Friday. August Nymex reformulated gasoline blendstock slid 1.1% to $1.5104 cents a gallon, diesel fell 1.2% to $1.46 and ICE gasoil slipped 2.6% at $441.75 a metric ton.
Write to Biman Mukherji at email@example.com
Corrections & Amplifications
This article was corrected at 07:59 a.m. because the original misstated that production rose to 9.25 million barrels from 88,000 barrels, in the penultimate paragraph. Data from the EIA also showed U.S. production increasing to 9.3 million barrels per day last week, up by 88,000 barrels per day from the week before.
Data from the EIA also showed U.S. production increasing to 9.3 million barrels per day last week, up by 88,000 barrels per day from the week before.
"Oil Prices Extend Declines After Volatile Overnight Session," at 06:45 GMT, misstated that production rose to 9.25 million barrels from 88,000 barrels, in the penultimate paragraph.
(END) Dow Jones Newswires
July 07, 2017 08:09 ET (12:09 GMT)