Oil prices down on EIA data

By Azernews

By Nigar Abbasova

Conflicting price drivers of OPEC's cuts and rising U.S. inventories still obstacle the crude prices on the way to reach steadiness and stability.

The U.S. inventories remain bloated and supplies high, dragging the prices down, while efforts of the Cartel of 13 producer nations in tandem with other major producers prevent the market from slumping further.

Oil dipped on February 16, as rising fuel inventories and crude production in the United States overweighed ongoing supply cuts led by the OPEC.

Brent crude futures were trading at $55.69 per barrel, down 6 cents from their last close, while U.S. West Texas Intermediate (WTI) crude futures dropped 10 cents to stand at $53.01 per barrel, Reuters reported. The price of a barrel of Azeri Light crude oil decreased $0.45 to stand at $56.97.

The Energy Information Administration (EIA) reported an increase of 9.5 million barrels in commercial crude oil inventories for the third week in a row, fixing an increase to a total of 518.1 million barrels, the index which exceeds the seasonal limit.

A day before, the American Petroleum Institute (API) estimated commercial inventories had jumped by 9.94 million barrels. The EIA reported that refineries processed 15.5 million barrels of crude last week, down from the previous week’s index of 15.9 million bpd.

Though prices started the week on the rise, influenced by the latest positive update from the OPEC, showing a strong compliance level, the API figures first partially offset the rise, while the EIA figures put a bullet period to optimism.

Both Brent and WTI crude futures have traded within a $5 per barrel price range since the start of the year.

Fitch Ratings' analysis said that major European oil companies need Brent prices of $50-$60 a barrel for cash flow to break even in 2017.

 The agency believes that 2016 represented the lowest point of the cycle, and oil companies' results should gradually improve on stronger oil prices, cost deflation and better spending discipline.