Big Gasoline Build Offset Crude Drawdown

Motor-fuel inventories climbed by 9.2 million barrels last week, the American Petroleum Institute was said to report.

While the offsetting products build cuts into bullish oil sentiments somewhat, the weekly development still contributes to the nation's and world's slow rebalancing of oil supply and demand following nearly two years of glut that caused crude prices to crash.

According to the source, the price for January Futures WTI oil increased by 0,19%, totalling to $57,58 per barrel on the New York Mercantile Exchange (NYMEX).

At the Multi Commodity Exchange, crude oil for delivery in December was trading sharply lower by Rs 26, or 0.70 per cent, to Rs 3,698 per barrel in 1,601 lots.

Information released Wednesday by the Energy Information Administration showed USA crude oil inventories decreased by 5.6 million barrels last week. A Bloomberg survey put the decline at 2.5 million barrels.

"A solid draw to crude inventories amid higher refinery runs-hark, almost 800,000 [barrels per day] above year-ago levels-has been offset by a whopper of a build to gasoline inventories", said Matt Smith, director of commodity research at ClipperData.

Despite this, some analysts said they expected refining margins to remain healthy into 2018.

The API report was also said to find that crude inventories slid by 5.48 million barrels last week and supplies at the key Cushing, Oklahoma, pipeline hub declined by 1.95 million barrels, the people said.

Among the heating fuels, January heating oil settled at $1.861 a gallon, down 2.8%.

Domestic refineries operated at 93.8% of operable capacity last week, up from 92.6% a week earlier, the EIA data showed.

But the price has slipped from November's peak at around $65 US a barrel, the highest since mid-2015.

The Organization of the Petroleum Exporting Countries and its allies, including non-OPEC Russia, agreed last week to extend a deal to hold down crude output ( by almost 2% through the end of next year.

"Robust global demand and tight supplies should see Brent crude oil rise to $70 per barrel by mid-year (2018)", said Bank of America Merrill Lynch in its 2018 outlook.

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