Published: Thu, June 08, 2017
Money | By Armando Alvarado

Oil prices tank to November levels on unexpected rise in U.S. inventories

Oil prices tank to November levels on unexpected rise in U.S. inventories

In the trailing week, the Energy Select Sector SPDR ETF (XLE) moved against crude oil prices.

"Oil prices are likely to remain range bound with OPEC providing support for prices and U.S. production growth limiting potential price gains", said Rob Haworth, investment strategist at U.S. Bank Wealth Management. This was a surprised development because of expectations of greater demand due to the start of the USA summer driving season following the long Memorial Day holiday week-end.

But the many traders, confronted by surplus oil in many parts of the world, were still unnerved. USA oil exports have surged the past six months from 442,000 barrels a day in December.

U.S. West Texas Intermediate (WTI) crude futures were at $48.13 per barrel, down 6 cents from the previous close, and 6 percent below its open on May 25.

"It's an unnerving time to see these key gulf producers expressing so much enmity at this point", John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund, said by telephone.

The Energy Information Administration (EIA) increased its USA output estimates with an increase in production to 9.3 million bpd expected for 2017 while the EIA also projected that 2017 output could reach 10 million bpd.

This wasn't the case when OPEC first launched its oil price war in 2014 in a bid to recapture market share.

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Cleveland was led by James with 39 points, 11 rebounds and nine assists. "They're going keep to coming, man", Curry said. Was Irving just exhausted ? His last points came with 4:28 left when he converted two free throws.

"The demand wasn't as strong as people had anticipated, so that was a negative", Mr. Flynn said.

- Also on June 7, suicide bombers and gunmen attacked the Iranian parliament and Ayatollah Khomeini's mausoleum in Tehran, killing at least 13 people in an unprecedented assault that Iran's Revolutionary Guards blamed on regional rival Saudi Arabia.

Iran is the only OPEC member with room for growth under a current deal to stem production in an effort to balance the market.

A campaign by leading Arab nations, including Saudi Arabia, Egypt and the United Arab Emirates, to isolate Qatar is disrupting trade, including oil. Its analysts cited better economics for companies' main projects and the fact that many are not outspending their cash flow.

Crude stockpiles at Cushing, Oklahoma, the delivery point for WTI and the biggest United States oil-storage hub, probably decreased by 750,000 barrels, according to a forecast compiled by Bloomberg.

Still, the drop in crude triggered a flurry of selling. Total motor gasoline supplied (the agency's measure of consumption) averaged about 9.6 million barrels a day for the past four weeks, down by 0.7% compared with the same period a year ago.

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