Oil prices steady following pullback driven by inventory data

WTI Crude Oil

Weekly December WTI Crude Oil

But with US crude oil inventories still less than 20 percent below a record 535.5 million barrels, the strength of Brent against WTI may ensure that exports stay strong for some time to come.

US oil prices slipped on Wednesday after a surprising increase in USA crude inventories, while USA gasoline futures rallied 1 per cent on a sharp falloff in inventories.

Oil prices jumped about 2 percent on Friday, with global benchmark Brent crude rising above $60 per barrel, on support among the world's top producers for extending a deal to rein in output and as the dollar retreated from three-month peaks. Early October production levels were impacted by Gulf of Mexico operations shut down ahead of Hurricane Nate.

The EIA report also showed gasoline and distillate inventories fell by more than 5 million barrels, and refinery utilization rates rose 3.3 percentage points.

U.S. West Texas Intermediate and international-benchmark Brent crude oil finished mixed on Wednesday.

Gasoline futures rose 1.8 cents, or 1.03%, to $1.7686 a gallon.

"Demand has been a little stronger than some people might have anticipated as we pushed out of the driving season, and that's where today's strength is coming from", said Gene McGillian, manager of research at Tradition Energy in Stamford, Conn. At that time, the OPEC-led group may announce an extension of the production cuts beyond the March deadline.

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But as they have demonstrated many times in the past, there's a limit to how much bad news can be ignored before traders send crude prices south again, and the deciding element may be Venezuela, which rattled many investors on Thursday as state-owned PDVSA offered no sign that it will make a critical debt payment of almost $985 million on Friday.

The Organization of the Petroleum Exporting Countries, Russia and other producers have cut oil output by about 1.8 million barrels per day (bpd).

OPEC and Russian Federation are set to formally discuss an extension of the deal at the cartel's next official meeting in Vienna on November 30.

Ian Taylor, the head of top oil trader Vitol, told the Reuters Global Commodities Summit earlier this month, he believes USA oil output could be set for one last hurrah in terms of production growth in 2018.

"The trend is up, but getting exhausted", said Robin Bieber, technical chart analyst and a director of London brokerage PVM Oil Associates. Clashes between Iraqi government troops and forces from the semiautonomous Kurdish region disrupted some oil production and exports this month.

OPEC and its non-OPEC partners have pledged to reduce production by around 1.8 million barrels per day until the end of March 2018 to ease a global supply glut. Kurdish authorities on Wednesday offered to suspend their independence drive, but Baghdad said it would continue its offensive to retake Kurdish territory.

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