Oil prices decline on United States crude build, weak euro zone data

Andrew Cummings
November 7, 2019

Futures lost as much as 0.8% in NY after rising 5.6% over the past three sessions.

While Beijing's statement on Thursday was viewed positively, a senior official of US President Donald Trump's administration told Reuters on Wednesday that a meeting between Trump and Chinese President Xi Jinping to sign an interim deal could be delayed until December as talks continue over terms and venue.

The narrative around the OPEC cuts is changing, said Rob Thummel, managing director and portfolio manager at Tortoise, a Kansas firm that oversees more than $21 billion in assets.

Gasoline stockpiles fell by 2.8 million barrels, versus an expectation for a draw of 1.8 million barrels.

Oil prices declined on Wednesday, pulled down by a larger-than-expected build in US crude stocks and weak euro zone economic figures, after gaining for three sessions on expectations of an easing in US-China trade tensions. Organization of the Petroleum Exporting Countries cut its estimates for the amount of crude it will need to pump in coming years as American shale floods the market, while the U.S. registered its first petroleum trade surplus in over four decades as production surged to a record.

Oil prices received some support earlier this week by expectations that China and the US were on the cusp of concluding phase one of their trade deal that would roll back much of the tit-for-tat tariffs. Yet prices remain about 15% below the peak reached in April amid concern that tepid consumption growth and record American shale-oil output will create a new surplus next year.

Brent crude futures fell $1.22, or 1.9%, to settle at $71.74 per barrel.

West Texas Intermediate (WTI) for December delivery lost 28 cents to $56.95 a barrel on the New York Mercantile Exchange as of 7:32 a.m.in London.

USA locations for a Trump-Xi meeting that had been proposed by the White House, including Iowa and Alaska, have been ruled out, a person familiar with the matter said. With further issues between a U.S. "The risk we feel especially with the recent crude oil inventory builds and reduction in demand forecasts will be to the downside for prices in the energy markets". "It's tough to surmount".

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