Oil slips on rising United States inventories

Oil prices fell on Wednesday after builds in US inventories reinforced expectations that increasing shale output this year would reduce the impact of production cuts by the Organization of the Petroleum Exporting Countries (OPEC) and other major exporters.
Benchmark Brent crude was down 44 cents a barrel at $55 by 1440 GMT. US light crude was down 42 cents at $52.76.
Weekly inventory data from the American Petroleum Institute (API) late on Tuesday showed US crude, gasoline and diesel stocks rose more than expected last week.
“The API report was bearish,” said Tamas Varga, senior analyst at London brokerage PVM Oil Associates.
Oil prices have found support in recent weeks from plans by OPEC and other producers to reduce output.
Around 1.5 million barrels per day (bpd) has already been taken out of the market from about 1.8 million bpd agreed by oil majors starting on Jan. 1, energy ministers said on Sunday, as producers look to reduce oversupply.
Bernstein Energy said global oil inventories declined by 24 million barrels to 5.7 billion barrels in the fourth quarter of last year from the previous quarter. The amount remaining equates to about 60 days of world oil consumption.
But as OPEC is cutting, US shale output is rising.
US oil production has increased by more than 6 percent since mid-2016, although it remains 7 percent below its 2015 peak. Output is back to levels reached in late 2014, when strong US crude output contributed to a crash in oil prices.
President Donald Trump’s promise to support the US oil industry has encouraged analysts to revise up their forecasts of growth in US oil production, which is already benefiting from higher prices.
A push by Republicans in the US House of Representatives for a shift to border-adjusted corporate tax could help propel US crude prices higher than global benchmark Brent, triggering large-scale domestic production, according to Goldman Sachs.

Source: Arab News