Oil dips as industry report shows swelling spare U.S. oil supply

Reuters: Oil hits nearly three-week high as Saudi Arabia to keep output well below cap

Larger Rise in Stockpiles Than Forecasts Weigh on Oil Prices

"It is likely that the. monthly data will show US crude oil production in December about 200,000-300,000 bpd above what was estimated in the weekly reports", Petromatrix analyst Olivier Jakob said in a note.

Crude oil futures were lower Wednesday morning, after industry data showed a surprising build in U.S. oil stockpiles.

Light, sweet crude for April delivery fell 90 cents, or 1.4%, to $63.01 a barrel on the New York Mercantile Exchange.

U.S. West Texas Intermediate crude were down 53 cents at $62.49 U.S. a barrel. Brent, the global benchmark, lost $1.22, or 1.9 percent, to $63.52 a barrel as of 10:51 a.m. EST (1551 GMT), after sliding as low as $63.19. While Canadian production has continued to rise, reflecting past investments, pipeline capacity constraints have limited producers' options for moving their products to US markets.

Saudi Arabia's minister of energy, industry and mineral resources, Khalid Al Falih, was presented with the "International Oil Diplomacy Person of the Year 2017" Award at the Energy Institute's International Petroleum (IP) Week on 22 February 2018, in London.

Crude oil prices were hovering near two-week highs on Monday, a possible effect of Saudi Arabia's statement on plans to continue cutting output levels and as last week's upbeat USA supply data also continued to support.

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That fits with the current policy of the Organization of Petroleum Exporting Countries and Russian Federation: their agreement to reduce supply is set to expire at the end of this year, with a gradual return of production after that.

Most of this liquidation seems to be attributable to profit-taking after the big rally in oil prices over the last seven months.

OPEC and its allies, including Russian Federation, have been withholding crude output by 1.8 million barrels a day since the start of 2017. The second quarter oil market is preparing for the driving season.

"It's a mixed market with both bearish and bullish signals", said Hong Sung Ki, a commodity trader at NH Investment & Securities Co.in Seoul. [RIG/U] Rising U.S. production has hindered OPEC's efforts to drain supplies. "The prices will lower down and remain steady most probably by the end of 2019".

"We've got a lot more oil to produce and we'll be through that 11 million barrel-per-day threshold much sooner than expected", said Streible. Crude slipped after an industry report was said to show an increase in U.S. crude stockpiles.

Moreover, new pipelines have increased connections around the USA, easing bottlenecks and allowing more US oil to reach its destination.

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