Data show U.S. crude oil inventories are up more than 5 percent from this time last year.
By Daniel J. Graeber
Oil prices move modestly lower to end the year as investors take
stock of supply and demand factors in the United States. File photo by
Monika Graff/UPI
| License Photo
A slight build in U.S. crude oil inventories
and an overall yearly gain in stockpiles helped send oil prices lower on
the last trading day for 2016.
Data from the U.S. Energy Information
Administration show crude oil inventories in the United States increased
614,000 barrels during the week ending Dec. 23. That compares with a
draw forecast by S&P Global Platts of 1.5 million barrels.
Platts reported that the main driver behind
the buildup in stockpiles was a slowdown in overall refinery activity,
despite a draw on gasoline stocks and higher exports of petroleum
products.
The price for Brent crude oil, now in the March contract, was
down 0.5 percent to start trading Friday at $56.54 per barrel. West Texas Intermediate, the U.S. benchmark price for oil,
lost 0.5 percent to open the day at $53.49 per barrel.
Brent crude oil prices are up more than 50
percent year-on-year in response to rebalancing in an oil market that
had been characterized by oversupply. A decision to
cut production
from members of the Organization of Petroleum Exporting Countries, with
the help of large producers like Russia, is meant to correct that
oversupply.
Platts analysis finds U.S. crude oil
inventories are up 6.8 percent still from last year. OPEC's maneuver put
a floor under crude oil prices of around $50 per barrel, but may be
encouraging operators in expensive U.S. shale basins to return to work.
A survey released by the
Federal Reserve Bank of Dallas found most respondents were anticipating an increase
in spending
on exploration and production in 2017. Michael D. Plante, a senior
economist for the bank, said the outlook in the No. 1 oil state in the
United States has "improved significantly."
Oil prices could be influenced later in the
day after oilfield services company Baker Hughes publishes rig count
data from last week. An increase would serve as a loose measure to gauge
the accuracy of Plante's sentiments.
U.S. markets are closed Monday to mark the New Year holiday.
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