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Oil Stumbles as Crude and Gasoline Declines Dash Expectations

Oil Extends Gains on Report of Surprise Drop in U.S. Stockpiles

(Bloomberg) -- Oil lost ground after government data showed U.S. crude and gasoline supplies shrinking less than forecast by an industry report.

Futures in New York closed down 0.5 percent Thursday after the Energy Information Administration said American oil stockpiles shrank for the first time in four weeks. Gasoline stocks fell as well, but both declines were below American Petroleum Institute estimates that had lifted the market earlier.

The numbers “came in a little shy of expectations," said Nick Holmes, an analyst at Leawood, Kansas-based money manager Tortoise. Still, he saw the report as bullish overall: “There are still lingering concerns in the market, so it’s good to see U.S. crude and gasoline demand pick back up."

Oil Stumbles as Crude and Gasoline Declines Dash Expectations

Oil has climbed more than 40 percent this year as the Organization of Petroleum Exporting Countries and its allies cut production and U.S. sanctions on Iran and Venezuela further tightened supply. The curbs have been so successful they’ve spurred worries the cartel could be pushing crude prices too high, increasing risks of a backlash from President Donald Trump.

West Texas Intermediate for May delivery fell 29 cents to $63.76 a barrel on the New York Mercantile Exchange. Brent for June settlement lost 10 cents to $71.62 a barrel on the London-based ICE Futures Europe exchange.

The EIA found U.S. oil stockpiles fell by 1.4 million barrels last week. The figure may ease concerns about American production overwhelming the market but was also less than half what API had found. Gasoline inventories shrank by 1.17 million barrels, the ninth straight weekly decline. Crude input at refineries declined.

While fears about the global economy have restrained oil’s rally, there have been recent signs that growth is holding up. China said Thursday that its first-quarter gross domestic product rose 6.4 percent from a year earlier, beating the 6.3 percent median estimate in a Bloomberg survey.

Other oil-market news:
  • Gasoline futures added 0.5 percent to $2.0418 a gallon.
  • A vow by Alberta’s incoming premier to cancel a C$3.7 billion ($2.8 billion) plan to increase crude-by-rail capacity is dividing Canada’s oil industry.
  • Saudi Aramco is in “serious discussions” to purchase as much as 25 percent of the refining and petrochemicals businesses of India’s Reliance Industries, the Times of India reported.

--With assistance from James Thornhill, Tsuyoshi Inajima and Grant Smith.

To contact the reporter on this story: Alex Nussbaum in New York at anussbaum1@bloomberg.net

To contact the editors responsible for this story: James Herron at jherron9@bloomberg.net, Catherine Traywick, Mike Jeffers

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