By Barani Krishnan
| NEW YORK
NEW YORK Oil prices steadied on Thursday, as a U.S. government report of larger-than-expected draws in diesel and gasoline helped prices rebound from losses incurred when data showed the first crude inventory build in six weeks was much larger than expected.Crude prices fell when the Energy Information Administration (EIA) said U.S. crude stocks swelled 4.9 million barrels in the week ended Oct. 7, much more than the 700,000 barrels forecast by analysts polled by Reuters. [EIA/S]Prices bounced back as the market turned its attention to product inventory drawdowns in the same EIA data. The EIA reported a drop of 3.7 million barrels for distillates, which include diesel and heating oil, and 1.9 million barrels decline for gasoline.Analysts had expected distillates to draw by just 1.6 million barrels and gasoline to decline by 1.5 million."There is a lot of seasonality in this data," Scott Shelton, energy futures broker at ICAP in Durham, North Carolina, said, adding that crude builds were common this time of year as U.S. refineries headed into maintenance.
Shelton said the rise of crude imports by 110,000 barrels per day (bpd) last week was "marginal" and "hard to get too excited about if you were bearish."John Kilduff, partner at New York energy hedge fund Again Capital, said that while more crude builds were likely in the coming weeks due to depressed refinery runs, "the declines in distillate fuels, of late, are starting to add up"."We remain a long way from supplies getting tight, but it is a trend worth monitoring," Kilduff added.
Brent crude LCOc1 was up 5 cents at $51.91 per barrel by 12:23 p.m. EDT (1623 GMT), after falling nearly 90 cents earlier.U.S. West Texas Intermediate (WTI) crude rose 10 cents to $50.28. It slid more than 80 cents initially on the EIA data.Oil prices have trended higher, with Brent gaining more than 13 percent, since the Organization of the Petroleum Exporting Countries announced on Sept. 27 its first planned output cut in eight years to rein in a global supply glut that forced crude to crash from highs above $100.
But OPEC's production figures jar with its expressed desire to cut output, with the group's September production reaching eight-year highs. [OPEC/M]Major oil industry executives and investors at a Reuters Summit in London differed in their views on the price direction for oil in coming months based on OPEC's likely action."In 2014, the big opportunity was in prices going down and now the big opportunity is in prices going up. That's the way I see it," said Pierre Andurand, manager of the $1.4 billion Andurand Capital fund in London, which has forecast $60 prices by the year-end. (Additional reporting by Ahmad Ghaddar in LONDON and Henning Gloystein in SINGAPORE; Editing by Bill Trott, Chizu Nomiyama and David Gregorio)
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Updated Date: Oct 13, 2016 22:48 PM