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NYMEX crude gains in Asia as API reports surprise drop in stockpiles

Published 10/18/2016, 07:07 PM
Updated 10/18/2016, 07:12 PM
© Reuters.  NYMEX crude up on API figures
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Investing.com - Crude prices posted a gain in early Asia on Wednesday as U.S. industry estimates showed a drop in stockpiles.

Crude oil for November delivery on the New York Mercantile Exchange rose to $50.80 a barrel.

The American Petroleum Institute said late Tuesday that crude oil stocks fell by a surprise 3.8 million barrels last week, following a 2.7 million build the previous week, the first in four weeks. The figures come ahead of more closely-watched official data from the Department of Energy later on Wednesday.

China reports third quarter GDP with a quarter-on-quarter gain of 1.8% and a year-on-year pace of 6.7% expected. As well in the Middle Kingdom, fixed asset investment is seen up 8.2% year-on-year for September and industrial production likely rose 6.4% year-on-year. Retail sales for September are seen up 10.6% year-on-year. China is the world's second largest importer of crude oil.

Overnight, oil prices drifted lower on Tuesday, with a planned production cut by the Organization of the Petroleum Exporting Countries largely priced into the market.

OPEC reached an agreement to limit production to a range of 32.5 million to 33.0 million barrels per day in talks held on the sidelines of an energy conference in Algeria late last month.

However, the group said it won’t finalize details or complete its production agreement until its next official meeting in Vienna on November 30, when an invitation to join cuts could also be extended to non-OPEC countries such as Russia.

Market analysts remain skeptical of the deal, amid uncertainty over how the agreement would be implemented.

OPEC's monthly report last week revealed that its oil production rose in September to the highest level in eight years, despite the agreement to potentially cut output.

The producer cartel pumped 33.39 million barrels per day last month, up 220,000 barrels per day from August.

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