Oil slips as U.S. gasoline stock build overshadows crude draw
* U.S. crude stocks down 5.1 mln bbls, gasoline up 5.7
* U.S. crude output hits another weekly record - EIA
* Brent prices underpinned by Forties outage
* Britain's biggest pipeline likely to be shut for several
(Updates to settlement, changes prices, adds details)
By David Gaffen
NEW YORK, Dec 13 (Reuters) - Oil prices slipped for a second
straight day on Wednesday, as a slump in U.S. crude stockpiles
was offset by a larger-than-forecast rise in gasoline
inventories and as U.S. crude output continued to grow to record
U.S. crude inventories last week dropped 5.1 million
barrels, more than anticipated, and production hit another
record high at 9.78 million barrels per day (bpd), government
The U.S. peak, when records were only kept on a monthly
basis, is 10.04 million bpd, set in November 1970.
Gasoline stocks jumped 5.7 million barrels, more than double
analysts' expectations for a 2.5 million-barrel gain.
"It's kind of a mixed bag across the board - a little bigger
than expected draw on crude but gasoline demand was down
slightly. Usually in this time of year you see a little bit more
demand," said Tariq Zahir, managing member at Tyche Capital
U.S. West Texas Intermediate crude settled down 54
cents at $56.60 a barrel, a 1 percent decline. Brent crude
ended down 1.4 percent, or 90 cents, at $62.44 a barrel.
The international benchmark lost 2.1 percent on Tuesday on a
wave of profit-taking after an unplanned shutdown of the Forties
North Sea pipeline early this week helped send the global
benchmark above $65 for the first time since mid-2015.
While the Forties shutdown has provided a price floor, early
gains quickly evaporated in a global market that is still
oversupplied and with output rising in the United States.
The U.S. Energy Information Administration on Tuesday
forecast that domestic crude oil output will rise by 780,000 bpd
to a record high of 10.02 million bpd in 2018.
"The fact that the market sold off so much after the Forties
outage shows that the market struggles to trend higher. Now,
we're basically where we were a month ago," Olivier Jakob of
Petromatrix consultancy said.
U.S. crude contracts that expire later next year experienced
a more dramatic selloff than front-month January, pushing the
curve further into "backwardation," which encourages producers
to drain inventories because it is more attractive to sell to
get the higher price for the prompt contract.
Brent has been underpinned by expectations for an extended
shutdown of Britain's biggest pipeline from its North Sea oil
and gas fields for repairs after a crack was found. Forties is
the largest of the five crude oil streams that underpin the
dated Brent benchmark.
The operator of the pipeline, which carries about 450,000
bpd of Forties crude, roughly a quarter of the North Sea's total
output, said it was still considering repair options and
reiterated that any repairs would take several weeks.
A number of producers, including BP and Royal Dutch
Shell, said they had closed down oil fields in
(Additional reporting by Scott DiSavino and Julia Simon in New
York and Julia Payne in London; editing by Marguerita Choy, Nick
Zieminski and Susan Thomas)
First Published: 2017-12-13 03:52:08
Updated 2017-12-13 22:21:40
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