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December 11, 2019

Oil prices decline due to rise in US crude stocks

Oil prices have declined after data released by the American Petroleum Institute (API) showed an unexpected rise in US crude stocks.

Oil prices have declined after data released by the American Petroleum Institute (API) showed an unexpected rise in US crude stocks.

Brent futures dipped by 45 cents to $63.89 a barrel, while US West Texas Intermediate (WTI) crude edged down 36 cents to $58.88 a barrel, reported Reuters. Oil prices also slipped as investors are awaiting information on fresh round of US tariffs on Chinese goods.

Japanese trading house Mitsubishi oil risk manager Tony Nunan was quoted by Reuters as saying: “At this time, everyone was expecting we would have strong draws in the inventory, but it was a build.”

Data released by the API highlighted an increase in the US crude stocks by 1.4 million barrels (Mbbls) to 447Mbbls in the recent week, while analysts expected a decline of 2.8Mbbls. The data also showed a rise in gasoline and distillate inventories.

Reuters noted that the Energy Information Administration (EIA) is yet to release the report later today. EIA noted that the US is on track to be a crude and fuel exporter for the first time on record on an annual basis in 2020.

Sources familiar with the plans said that Exxon Mobil and Hess intend to export the first-ever shipments of crude oil from Guyana between January and February 2020, adding to the global supply. Meanwhile, investors are awaiting news on British election, and US and European Central Bank meetings for further trading actions.

People with knowledge of PDVSA data said this week that crude output in Venezuela increased more than 20% in November 2019 from October 2019 since the US tightened sanctions on state oil company PDVSA in August 2019.

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