WTI futures drop after DoE reports sharp build in gasoline stocks

WTI futures drop after DoE reports sharp build in gasoline stocks

"If you extend the production-cut agreement through the end of 2018, that surplus will basically erode away, which will be a good thing for oil prices in the long-term", Rob Thummel, managing director at Tortoise Capital Advisors LLC, which handles $16 billion in energy-related assets, said in a Bloomberg Television interview.

Late Monday, the American Petroleum Institute (API) reported a large draw of 5.481 million barrels of United States crude oil inventories for the week-ending December 1.

OPEC and 10 major producers outside the cartel, including Russian Federation, agreed Thursday to extend a deal to hold down crude output by almost 2% through the end of next year. "If they do adhere, that will keep the oil price elevated".

Market surveys estimated that U.S. gasoline and distillate inventories could have risen by 1,741,000 barrels and 967,000 barrels during the same period. Total volume traded was about 31 percent below the 100-day average.

West Texas Intermediate for January delivery was at $57.42 a barrel on the New York Mercantile Exchange, down 20 cents, at 7:45 London. An extension was largely priced in by the market and prices have reacted tepidly to the official decision. Prices rose 15 cents to $57.62 on Tuesday. Crude prices have risen more than 20% since September.

Brent crude futures were down $1.28 at $61.55 USA a barrel approaching noon ET Wednesday, after reaching a session high of $62.93 US, while USA crude futures dropped $1.33, or 2.2%, to $56.33 U.S.

U.S. crude oil imports averaged 7.2 million barrels per day last week-a decrease of 127,000 barrels per day from the previous week. It ranks first in oil futures trade.

"Attention will no doubt be focused not only on inventories but also on US crude oil production", according to analysts at Commerzbank. ICE gasoil, a benchmark for diesel fuel, changed hands at $554.75 a metric ton, down 0.31% from the previous settlement.