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Oil prices end slightly lower as inventories rise, traders wait for OPEC+ response to release reserves

Oil futures prices ended slightly lower on Wednesday after US crude inventories rose as traders awaited OPEC+’s response to a coordinated release of strategic stockpiles by several countries.

West Texas Intermediate Crude for January delivery
CL00,-0.27%

CLF22,-0.27%

down 11 cents, down 0.1%, at $78.39 a barrel on the New York Mercantile Exchange. January Brent Crude Oil
BRNF22,-0.12%,
global benchmarks, fell 6 cents, or 0.1%, to end at $82.25 a barrel on ICE Futures Europe.

Crude oil inventories rose by 1 million barrels for the week ended Nov. 19, while gasoline stocks fell 600,000 barrels and distillates rose 2 million barrels, the U.S. Energy Information Administration said.

Analysts surveyed by S&P Global Platts were, on average, looking for crude inventories to fall by 1.3 million barrels, while gasoline and distillate stocks were expected to fall by 900,000 barrels.

The American Petroleum Institute, a trade group, late Tuesday said oil inventories rose 2.3 million barrels last week, while gasoline supplies rose 600,000 barrels and distillate supplies fell 1.5 percent. million barrels, according to Dow Jones Newswires.

WTI and Brent both posted strong gains on Tuesday, after the Biden administration announced it would release 50 million barrels of crude from the Strategic Petroleum Reserve in an effort involving China, India, Japan, South Korea and the UK aim to push up energy prices. .

Carsten Fritsch, commodities analyst at Commerzbank, said: “Yesterday’s price reaction can be explained by the fact that this step has been anticipated for days, a sword of Damocles has caused Oil prices have fallen sharply before.

Read: Why oil prices rise despite US exploitation of Strategic Petroleum Reserve

The Organization of the Petroleum Exporting Countries and its allies – or OPEC+ – will meet next week. OPEC+ has rejected calls by the Biden administration and other organizations to accelerate production increases. OPEC+ increased monthly production to 400,000 bpd as the organization lifted its previous production cuts.

Now, traders wonder if OPEC+ will cancel planned increases in response to the release of strategic reserves. Saudi Arabia and Russia are considering a move to pause the recent production increase, The Wall Street Journal reported on Wednesday, citing people familiar with the discussion.

However, it remains unclear whether the US will bring the full 50 million barrels to market as under the swap agreement being used, it must first be purchased by private oil companies and then returned with interest. capacity, at a later date, Fritsch said. “Without a severe supply shortage, the companies mentioned are unlikely to take advantage of this option unless they are given additional incentives. Therefore, it is entirely conceivable that the target figure of 50 million barrels will almost never be used up,” he said.

“With API data, risks to this are expected [draw] Chris Weston, head of research at Pepperstone, said. “However, we don’t see any real worries about crude oil prices from the API data here. An inventory build above 3 million barrels would be a risk for long-term crude.”

US markets are closed on Thursday for the Thanksgiving holiday. That means traders have seen a large amount of data earlier than usual, including the EIA’s weekly natural gas report, which showed 21 billion cubic feet of production last week. Analysts surveyed by S&P Global Platts are looking for a 23 billion cubic foot drawdown.

January natural gas contract
NGF22,+ 0.85%

rose 10.10 cents, or 2%, to close at $5,0680 per million British thermal units.

Weekly data from Baker Hughes, usually released on Friday, shows that the number of US oil rigs rose by 6 to 467.

Petrol term in December
RBZ21,-1.01%

down 0.8% to $2.3197/gallon, while December heating oil
HOZ21,-0.39%

fell 0.1% to close at $2,383 per gallon.

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