Oil prices steady after US fuel inventories build

Posted July 19, 2019

West Texas Intermediate crude futures were down $1.64 a barrel, or 2.9% at $55.14, after earlier rising to as much as $57.32 a barrel.

Brent for September settlement rose 7 cents to $63.73 a barrel on the ICE Futures Europe Exchange.

"Oil markets are very heavy under the weight of a counter-seasonal build in gasoline inventories, which is typically a harbinger of worse things to come", said Stephen Innes, managing partner at Vanguard Markets.

On the Multi Commodity Exchange, crude oil for delivery in July contracts shed Rs 8, or 0.2 per cent, to Rs 3,908 per barrel. They fell 1% on Wednesday, and 3% on Tuesday. They ended down 3.2% in the previous session.

Oil prices rose on Wednesday after steep falls in the previous session, although US crude trailed gains for worldwide benchmark Brent following data showing USA crude inventories fell less than expected.

United States crude inventories fell 3.1 million barrels, EIA data showed, more than analysts' forecasts for a decrease of 2.7 million barrels.

USA offshore oil and gas production has continued to return to service since Hurricane Barry passed through the Gulf of Mexico last week, triggering platform evacuations and output cuts.

Distillate fuels stockpiles, which include diesel and heating oil, rose by 6.2 million barrels, compared with expectations for a 613,000-barrel gain, the API data showed. In addition to the USA storm, tensions in the Middle East have dictated market moves in recent weeks.

USA officials say they are unsure whether an oil tanker towed into Iranian waters was seized by Iran or rescued after facing mechanical faults as Tehran asserts, creating a mystery at a time of high tension in the Middle East. U.S President Donald Trump said on Tuesday progress had been made with Iran but Tehran denied it was willing to negotiate over its missile program.

Japan's exports fell for a seventh straight month in June, with shipments to China falling more than 10%, while Japanese manufacturers' business confidence fell to a three-year low.

US officials say they are unsure whether an oil tanker towed into Iranian waters was seized by Iran or rescued after facing mechanical faults as Tehran asserts, creating a mystery at sea at a time of high tension in the Gulf.