Crude Oil Plunges Almost 3% On Gasoline Surplus

U.S. West Texas Intermediate crude futures settled down $1.66, or 2.9 percent, to $55.96 a barrel.

The West Texas Intermediate for January delivery decreased 1.66 USA dollars to settle at 55.96 dollars a barrel on the New York Mercantile Exchange, while Brent crude for February delivery lost 1.64 dollars to close at 61.22 dollars a barrel on the London ICE Futures Exchange.

USA crude stockpiles probably declined by 2.5 million barrels last week, according to the median estimate in a Bloomberg survey before an Energy Information Administration report scheduled to be released on Wednesday.

Last week, the American Petroleum Institute (API) reported a surprise build of 1.821 million barrels of crude oil when analysts had expected a drawdown of 3.15 million barrels. A Bloomberg survey put the decline at 2.5 million barrels.

Distillate inventories also saw a build this week, rising 4.259-million barrels, against a forecast of a 548,000-barrel build. The US rig count climbed again for the week ending 1st December 2017.

Distillate inventories, too, saw a build this week, up 4.259 million barrels, against a forecast of a 548,000-barrel build.

Analysts said a weak trend in global markets, where oil prices dropped, mainly led to fall in crude prices at futures trade here.

Inventories at the Cushing, Oklahoma, site decreased by 1.951 million barrels this week.

Domestic refineries operated at 93.8% of operable capacity last week, up from 92.6% a week earlier, the EIA data showed. "U.S. oil inventories would be 32 million barrels lower if it weren't for SPR releases this year-down over 110 million barrels from March's record, rather than the 80 million barrels they are down now".

USA crude production rose to 9.7 million barrels per day, another weekly record, though short of all-time records reached in the 1970s.

Meanwhile, analysts said investors tended to take profit after oil prices posted solid gains in the previous session. An extension had been largely priced in but rising USA oil production has been a key concern for the market.

This signals that demand for crude oil from refineries will plummet in the next few weeks. Back in September 2015, he forecast crude would slump to between $25 and $30, five months before prices dipped to around $26.



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