Crude Oil slips below $52 as abundant supplies weigh
Commodity Online | October 17 2016
UPDATED 10:45:13 IST

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Crude Oil slipped below $52 a barrel on Friday, giving up an earlier gain, as abundant crude supplies outweighed tighter U.S. fuel inventories and OPEC's plans to cut output. Brent crude reached a 2016 high near $54 on Monday, underpinned by OPEC's Sept. 28 deal to reduce oil production, before weakening on rising U.S. crude stocks and as the Organization of the Petroleum Exporting Countries' own numbers showed output is still rising.

U.S. crude inventories overall rose by 4.9 million barrels, the first increase in six weeks, the government's Energy Information Administration reported on Thursday. But stocks at the Cushing delivery hub for U.S. crude futures declined and U.S. inventories of distillates, which include diesel and heating oil, fell by 3.7 million barrels.

Gasoline stocks dropped by 1.9 million barrels. U.S. crude's structure gained support from the extended outage of a pipeline capable of delivering 450,000 barrels per day of crude into Cushing. OPEC's plan is to cut its supply to between 32.5 million barrels per day (bpd) and 33 million bpd to help to balance supply and demand and revive prices that remain less than half of the levels reached in mid-2014.

However, a lack of much detail in the initial agreement, such as how much each of the 14 members can pump and the scale of any contributions from non-OPEC countries such as Russia, has left analysts skeptical. OPEC's own monthly report on Wednesday put production at 33.39 million bpd in September.

Courtesy: Religare