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Crude Oil Firms Above $50

21 September 2017

USA crude stocks rose last week and refineries raised output, while gasoline stocks and distillate inventories fell, the Energy Information Administration said on Wednesday. Crude inventories rose 5.9 million barrels in the week to September 8, compared with analysts' expectations for an increase of 3.2 million barrels. The contract stated a weekly rise of 5.1 percent with its strongest form in almost two months.

"If I look at this week's EIA data, post hurricane. the refined products drawdown implies that refineries are not yet back to normal", he said. USA gasoline inventories shrank last week to a level not seen since November 2015 and distillate stockpiles slid by the most since 2011, the Energy Information Administration said. At the same time, the Organization of Petroleum Exporting Countries and its allies are said to be discussing extending by more than three months the output cuts that expire in March.

"The impact of Hurricane Harvey can still be seen in today's larger-than-expected build in the USA commercial crude stockpile", said Abhishek Kumar, Senior Energy Analyst at Interfax Energy's Global Gas Analytics in London.

Oil has risen nearly 6% since Harvey slammed into the Texas coast on August 25, swamping the heart of the US refining industry and disrupting everything from tanker arrivals to gasoline production. The pace at which refiners processed crude rose by the most since 2008, yet distillate supplies slid by 5.69 million barrels and gasoline stockpiles fell by 2.13 million barrels.

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Elsewhere, Brent oil for November delivery on the ICE Futures Exchange in London was up 66 cents or about 1.20% at $55.80 a barrel, not far from last Thursday's five-month high of $55.98. Total volume traded was about 2% below the 100-day average. The global benchmark crude traded at a premium of $US5.60 to November WTI.

With OPEC signaling its determination to curb supplies, oil prices have risen sharply over the past week. It's "another sign that the refining demand is going to be very strong".

The key level for November WTI traders remains $50.30.

The October front-month futures CLc1 contract expires on Wednesday.

Crude Oil Firms Above $50