Crude Edges Lower After Industry Report Shows Build in Cushing

(Bloomberg) -- Oil declined marginally after an industry group showed a build in Cushing, Oklahoma, stockpiles.

Futures in New York edged lower from the settlement Wednesday after the
American Petroleum Institute was said to report a draw in nationwide oil inventories that was offset by expansions in Cushing, gasoline and distillate stockpiles. Before the report, oil prices settled 1.7 percent lower after emerging-market stocks careened toward bear-market territory while a basket of the most-vulnerable currencies dipped to the lowest in more than a year.

Oil is falling amid concern that “emerging-market contagion is going to suppress economic growth and limit demand,” said Gene McGillian, manager of market research at Tradition Energy.

The U.S. benchmark crude briefly touched a 7-week high on Tuesday as Tropical Storm Gordon roiled the Gulf of Mexico. More than 9 percent of U.S. Gulf of Mexico oil output remained shut down on Wednesday as Gordon weakened and drifted northward over Mississippi.

Meanwhile, even as sanctions against Iran degraded the Islamic Republic’s ability to help supply global oil markets, OPEC and allied producers were working to finalize a long-term cooperation framework by December, according to the cartel’s secretary-general, Mohammad Barkindo.

West Texas Intermediate for October delivery traded at s $68.64 a barrel at 5:22 p.m. after settling at $68.72 a barrel on the New York Mercantile Exchange.

Brent for November settlement dipped 90 cents to end the session at $77.27 on the ICE Futures Europe exchange. The global benchmark crude traded at a $8.85 premium to WTI for the same month, the widest since June.

The API was said to report that total crude stockpiles fell by 1.17 million barrels while Cushing inventories rose 631,000 barrels, gasoline gained 1 million barrels and distillates increased 1.75 million barrels. If the EIA confirms the Cushing build on Thursday, it will have been the fourth straight week of increases.

Meanwhile, Gordon weakened to a tropical depression after coming ashore near the Alabama-Mississippi border late Tuesday.

“The market was clearly overheated on storm concerns,” said Thomas Finlon, director of Energy Analytics Group LLC in Wellington, Florida. “The real sharp run-up yesterday was quite an overreaction.”

Oil-market news:

• Gasoline futures fell 1.5 percent to settle $1.9648 a gallon.
• Saudi Aramco cut pricing for its main crude grades to buyers in Asia.
• EOG Resources Inc., the biggest U.S. shale-oil explorer, won’t play a part in the acquisition wave sweeping the Permian Basin, according to the Chief Executive Officer Bill Thomas.

©2018 Bloomberg L.P.