Oil Down on Record U.S. Crude Stocks

Posted by Joseph Keefe

U.S. crude oil stocks hit all-time high, EIA data

Oil prices fell on Thursday after U.S. crude stocks hit an
all-time high and official data showed Russian oil production
unchanged in February, with no further cuts to tighten the market
and drain global oversupply.

Benchmark Brent crude oil was down 50 cents a barrel at $55.86 by
1125 GMT. U.S. light crude was 50 cents lower at $53.33.

Crude inventories in the United States, the world's biggest oil
consumer, rose by 1.5 million barrels last week to a record 520.2
million barrels, official figures showed.

Russia's oil output was unchanged in February from January at
11.11 million barrels per day (bpd), signalling a pause in
Moscow's efforts to curb production as part of a global deal,
energy ministry data showed on Thursday.

Crude oil prices slipped after the release of the Russian data
but remained locked within tight trading ranges, supported by
evidence of OPEC production cuts designed to reduce the
oversupply that has weighed on prices for more than two years.

The Organization of the Petroleum Exporting Countries cut its oil
output for a second month in February, a Reuters survey found,
showing the exporter group has boosted already strong compliance
to around 94 percent.

"There is a very stale smell hanging over the market," Ole
Hansen, head of commodity strategy at Saxo Bank in Denmark, told
Reuters Global Oil Forum.

"I still see the risk of $50 a barrel before $60 on Brent, but
have to acknowledge that we have so far seen very limited selling

Wang Tao, Reuters market analyst for commodities and energy
technicals, said Brent remains neutral in a range of
$55.93-$57.26 a barrel, and could move out of this price band in
either direction.

U.S. crude looks more bearish, the Reuters analyst said, and
could drop to $53.21 a barrel, as it had cleared support at

By Christopher Johnson

Mar 2, 2017

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