Oil drops after rising US inventories

Crude oil storage tanks are seen in an aerial photograph at the Cushing Oil Hub in Cushing, Oklahoma, USA, April 21, 2020. REUTERS / Drone Base / File Photo

LONDON, Sept. 30 (Reuters) – Oil prices fell after markets opened in the United States, wiping out earlier gains, rising crude oil inventories in the United States and the strength of the dollar outweighing optimism in the supply deficit forecast.

US oil plunged $ 1.00 to $ 73.83. Brent crude for November delivery fell 62 cents to $ 78.02 a barrel by 12:45 GMT on the day it expired, while December loading crude fell 93 cents to $ 77.16.

U.S. oil and fuel inventories rose 4.6 million barrels to 418.5 million barrels in the week to September 24, the U.S. Department of Energy’s Energy Information Administration (EIA) said on Wednesday. Energy.

Another generally bearish development, the US dollar hit a new high in a year, making oil more expensive for holders of other currencies.

But expectations of a continued supply deficit have supported prices. Citigroup predicts that oil balances will be in deficit by 1.5 million barrels per day on average over the next six months, even with a continued increase in supply.

Both November loading contracts are up about 8% from September.

The Organization of the Petroleum Exporting Countries and its allies, including Russia, a group known as OPEC +, are due next week to honor a pact to add 400,000 barrels per day (bpd) to their November production. Read more

PVM analyst Tamas Varga said the expected growth in demand means that the agreed production increase would not be enough to keep inventories from falling for the remainder of the year.

The rise in US inventories last week came as production in the Gulf returned to near levels reached before Hurricane Ida hit about a month ago.

A possible drag on oil prices has been the electricity crisis and concerns in China’s housing market, which have affected sentiment as any fallout for the world’s second-largest economy is likely to affect demand for oil, said analysts.

China is the world’s largest importer of crude and its second largest consumer behind the United States.

Additional reporting by Aaron Sheldrick in Tokyo Editing by Elaine Hardcastle, David Goodman and David Evans

Our Standards: Thomson Reuters Trust Principles.

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