Oil below $37 as US in­ven­tory rise coun­ters out­put freeze plan

The Pak Banker - - MARKETS/SPORTS -

Oil edged fur­ther below $37 a bar­rel on Wed­nes­day as an in­dus­try re­port show­ing a rise in U.S. crude stock­piles to a new record coun­tered sup­port from pro­ducer ef­forts to tackle a sup­ply glut.

US crude in­ven­to­ries jumped by 9.9 mil­lion bar­rels last week, the Amer­i­can Pe­tro­leum In­sti­tute (API) said on Tues­day, much more than the 3.6-mil­lion­bar­rel in­crease an­a­lysts had fore­cast.

Global bench­mark Brent crude was down 27 cents at $36.54 a bar­rel by 0946 GMT. On Tues­day, it reached $37.25, the high­est in al­most two months. U.S. crude, also known as WTI, was down 66 cents at $33.74. "The strong in­ven­tory build re­ported by the API would ex­plain why WTI is fall­ing more than Brent," said Carsten Fritsch, an­a­lyst at Com­merzbank in Frank­furt.

Traders will look closely at the U.S. govern­ment's weekly sup­ply data on Wed­nes­day for con­fir­ma­tion of the in­ven­tory build. The En­ergy In­for­ma­tion Ad­min­is­tra­tion fig­ures are due at 10:30 a.m. EST (1530 GMT).

Brent has risen 35 per­cent from a 12year low of $27.10 hit on Jan. 20, adding to ex­pec­ta­tions that fur­ther drops may not be on the cards. An an­a­lyst at the In­ter­na­tional En­ergy Agency said on Tues­day prices ap­peared to have bot­tomed.

Crude has col­lapsed from more than $100 in mid-2014, pres­sured by ex­cess sup­ply and a de­ci­sion by the Or­ga­ni­za­tion of the Pe­tro­leum Ex­port­ing Coun­tries to aban­don its tra­di­tional role of cut­ting pro­duc­tion by it­self to boost prices.

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