Oil prices decline on rising U.S. inventories

Oil prices decline on rising U.S. inventories

John Kilduff, founding partner at Again Capital, remarked, "The crude market is much more skeptical about a deal", and he added that with further issues between the two countries oil prices are not going to rise now: "It's tough to surmount".

West Texas Intermediate crude futures rose 37 cents, or 0.7 per cent, from their last close to $56.72 a barrel.

According to the data released by the Energy Information Administration on Wednesday, crude oil stockpiles in the US increased by 7.9 million barrels in the week ended November 1, more than five times the expected increase as refiners cut output and exports fell.

Brent crude futures LCOc1 were down 3 cents, at $61.71 a barrel by 0348 GMT after settling down $1.22 per barrel, or nearly 2% on Wednesday.

"This is definitely a shocking number, even if you're bearish you're shocked", said Phil Flynn, an analyst at Price Futures Group.

Jeffrey Halley, senior market analyst at OANDA, said the discouraging trade deal news and a massive rise in USA crude inventories pulled down both Brent and WTI overnight.

Gasoline stocks dropped by 2.8 million barrels, compared with a forecast of a 1.8 million-barrel drop, and distillates, which include diesel and heating oil, lost 622,000 barrels, versus expectations for a decline of 949,000s, the EIA said. Negotiators are also discussing lowering the 25 percent duty on about $250 billion of imports that Trump imposed a year ago, the people said. If a deal is signed, global growth would receive a big boost, which would likely send crude prices to higher ground.

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Middle East tensions offered some support.

Wednesday also saw the type of bad news/good news report that tends to mitigate losses, ie: word that Iran started to inject uranium gas into centrifuges at an underground nuclear facility, thus further violating the nuclear deal between the Islamic republic and world powers.

The United States pulled out of the nuclear pact a year ago and has imposed tough new sanctions on Iran.

"The feel-good factor is missing this morning", said Stephen Brennock, an analyst at PVM Oil Associates Ltd.in London.

"Accordingly, conditions are ripe for tensions in the region to escalate and for the geopolitical risk premium to strike back with a vengeance".

At the moment the barrel of WTI is gaining 1.85% at $57.38 and faces the next hurdle at $57.85 (monthly high Nov.6) followed by $60.00 (psychological handle) and then $60.94 (monthly high Jul.11).

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