Oil Declines on Worries Over Rising U.S. Inventories
2019年1月18日 - 06:25AM
Dow Jones News
By Dan Molinski and Sarah McFarlane
-- Oil prices declined Thursday as investors worried about rising U.S. oil
production and bulging inventories of gasoline amid sluggish demand that
may point to a coming economic slowdown.
-- West Texas Intermediate futures, the U.S. oil standard, ended 0.5% lower
at $52.07 a barrel on the New York Mercantile Exchange. The decline ended
a two-session upward streak.
-- Brent crude, the global oil benchmark, ended 0.2% lower at $61.18 a
barrel on London's Intercontinental Exchange.
HIGHLIGHTS
U.S. Inventories: Thursday's modest decline in WTI was somewhat
of a delayed reaction to mostly-bearish data released Wednesday by
the Energy Information Administration. The EIA said U.S. oil
inventories fell by 2.7 million barrels last week, but gasoline
inventories rose by 7.5 million barrels, taking them to the highest
total in nearly two years and sparking more worries about weaker
demand. The data also showed U.S. oil production surged to a new
record-high 11.9 million barrels a day.
"This report does little to alleviate ongoing concerns," said
analysts at Simmons Energy in a research note Thursday. "We
wouldn't be surprised if the ugly product stats begin weighing on
the overall crude complex, as there is a lingering concern that
bloated product inventories shift into the crude inventories as
refinery maintenance kicks off."
The EIA also published its latest Short Term Energy Outlook
projecting U.S. production would rise by 1.14 million barrels a day
on the year to an average of 12.07 million barrels a day in 2019.
This could be a headache for the Organization of the Petroleum
Exporting Countries, which has been cutting its output in the hope
of stabilizing prices and preventing global inventories from
rising. "OPEC will have to adapt to whatever output is coming from
the U.S.," said Michael Poulsen, oil analyst at consulting firm
Global Risk Management, adding that America's export capacity would
rise this year with some new infrastructure projects due to come on
line.
Stock Markets: Keeping oil prices subdued throughout much of the
session Thursday were U.S. stocks that traded lower Thursday
morning after overnight weakness in European and Asian markets,
reducing some speculative risk appetite. Wall Street began to
recover later in the session, while oil markets digested other
issues including the U.S.-China trade dispute and broader, global
issues. "Oil markets are monitoring geopolitical risks," said
Michael Wittner, global head of oil research at Société Générale.
"Venezuela has entered a period of increased political uncertainty,
with higher risks of instability; the opposition is making the case
that [President Nicolas] Maduro is no longer the legitimate leader
of the country."
INSIGHT
OPEC cuts: Members of OPEC and its allies agreed in December to
cut output starting this month, and data Thursday suggest it got an
early start on the cutbacks. In its closely watched monthly oil
market report, OPEC reported a 751,000 barrel-a-day decline in
crude output last month, to average 31.58 million barrels a day.
The drop off was primarily driven by Saudi Arabia -- the de facto
head of OPEC and the world's largest exporter of crude -- with a
reduction of 468,000 barrels a day, according to the cartel.
Those cuts highlight the continued tug-of-war in the investing
community as it tries to weigh the bullish signals coming from OPEC
against the bearish signals coming from U.S. production and fuel
inventories.
AHEAD
Baker Hughes reports its weekly rig-count report on U.S.
drilling activity on Friday.
--Christopher Alessi contributed to this article.
Write to Dan Molinski at Dan.Molinski@wsj.com and Sarah
McFarlane at sarah.mcfarlane@wsj.com
(END) Dow Jones Newswires
January 17, 2019 16:10 ET (21:10 GMT)
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