Oil is mixed amid signs of strong demand for petrol in the US

Tokyo — Oil prices were mixed on Thursday as the market struggled to digest signs of strong petrol demand in the US, the world’s biggest consumer of the fuel, with a statement from oil producers that they are putting more crude on the market.

Brent crude futures fell 11c, or 0.2%, to $72.79 a barrel at 4.01am GMT. West Texas Intermediate (WTI) crude futures climbed 6c, or 0.1%, to $68.82.

Both benchmarks rose by 1% on Wednesday after inventory data from the US Energy Information Administration (EIA) reported on Wednesday that US petrol stockpiles fell along with supplies of distillate fuels. Motor fuel demand also rose from the week before and was up from a year earlier.

However, the administration also reported US oil production reached a record 11-million barrels a day. The Us has added nearly 1-million barrels a day in production since November, thanks to rapid increases in shale drilling.

Also, a meeting of members of oil cartel Opec and non-Opec producer monitoring their supply pact reported on Wednesday that compliance with the agreement has declined, meaning more oil is available to the market.

The bullish tone sparked by the petrol data was unlikely to last, said Stephen Innes, head of trading Asia-Pacific at brokerage Oanda.

“President [Donald] Trump is doing everything in his power to lower petrol prices,” he said.

“With Russia quick to offer the president a supply olive branch and Saudi Arabia mainly in his back pocket when it comes to increasing their supply, its challenging to see [the] petrol numbers turning the bearish market’s tide,” he said.

Petrol inventories fell by 3.2-million barrels last week, while distillate stockpiles, which include diesel and heating oil, dropped by 371,000 barrels, the Energy Information Administration said on Wednesday.

A Reuters poll taken before the data release had forecast that petrol stocks would be unchanged and distillate stockpiles would show a build of around 900,000 barrels.

A sharp jump in crude oil inventories in the US also added to the bearish tone in the market.

US crude stocks rose by 5.8-million barrels last week, compared with a forecast of a decline of 3.6-million barrels.

Oil markets have fallen over the last week as Saudi Arabia and other members Opec member and Russia have increased production and as some supply disruptions have eased.

Opec and non-Opec’s compliance with oil output curbs has declined to around 120% in June from 147% in May, two sources familiar with the matter told Reuters on Wednesday.

Reuters