Oil Mixed on Possible OPEC Production Increase, Higher Crude Stockpiles

MID-DAY: Oil continues to slump on reports of higher production; North Korea US tensions weight Wall Street

Inventories rose in part due to a sharp 1.4 million-barrels-per-day hike in net crude imports.

United States distillate stocks fell 951,000 barrels to 113.995 million barrels. Diesel inventories are seen down about 1.3 million barrels.

The API also reported a build in gasoline inventories for the week-ending May 18 in the amount of 980,000 barrels. USA refineries produced about 10 million barrels of gasoline a day last week, down by about 500,000 barrels compared to the prior week.

U.S. gasoline stocks built 1.883 million barrels to 233.897 million barrels, compared with an average increase of 386,000 barrels from 2013-17.

As of 1628 BST, front month West Texas Intermediate crude oil futures on the ICE were 0.866% lower to $71.58 a barrel.

At 12:49p.m. EDT on Tuesday, WTI Crude was up 0.32 percent at $72.58. The 52-week range on July futures is $45.18 to $72.90.

Oil prices fell about US$3 per barrel on Friday as Saudi Arabia and Russian Federation discussed easing supply curbs that have helped push crude prices to their highest since 2014.

Oil prices continued to drop on Thursday (May 24) amid speculation that OPEC will increase production to curb a shortage in Venezuela, and on newly reinstated USA sanctions against Iran.

The increase in USA inventories came from a combination of reduced exports and rising imports; the latter is somewhat surprising, Flynn said, because Brent crude is currently trading at a $7 premium to us crude, making exports more advantageous right now. Gasoline stockpiles also rose according to the EIA, hinting that U.S. drivers are resisting USD3/gal at the pump.

The May 23 EIA report showed that stockpiles held at the biggest US pipeline hub in Cushing, Okla., fell by 1.12 million barrels, the first decline in five weeks.

At the moment the barrel of WTI is losing 2.73% at $68.62 facing the next down barrier at $67.65 (low May 8) seconded by $66.94 (55-day sma) and finally $66.86 (low May 1). The five-year average for the period is a 3.8 million-barrel draw. Chevron (CVX) rose 0.4% to 128.70, back in buy range after breaking out of a cup-with-handle base with a 128 buy point.

Trump is singled out as the instigator of higher prices.

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Chevron Corp. (NYSE: CVX) traded down about 1%, at $126.90 in a 52-week range of $102.55 to $133.88.

"The lack of a currency response means that Canadian consumers are feeling the full impact of higher oil prices", he said.

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