Oil Rally Stutters as Plentiful Gasoline Muddies Demand Outlook
December 19, 2019 EnergyNow Media
By Elizabeth Low and Alex Longley
(Bloomberg) Oil hovered near $61 a barrel for a second day after the longest streak of gains in almost two months as traders weighed bearish signs of swelling U.S. fuel inventories against a decline in domestic crude stockpiles.Futures in New York were little changed. Official U.S. data showed gasoline, diesel and heating oil stockpiles swelled last week, reigniting demand concerns. Nationwide crude inventories fell to levels not seen since early November, contradicting figures from the American Petroleum Institute that pointed to a build.
Crude has gained more than 10% this month following an agreement by the Organization of Petroleum Exporting Countries and its allies for deeper-than-expected output cuts, and positive trade signals between the U.S. and China. American crude exports also rose last week to the highest level since October, contributing to the inventory draw, the Energy Information Administration said.
“The market is getting into festive mode,” PVM Oil Associates analyst Tamas Varga wrote in a report. The EIA data was “not unexpectedly bullish but it was much more positive than the API data released the night before,” he said.
West Texas Intermediate crude for January delivery, which expires Thursday, fell 14 cents at $60.79 a barrel on the New York Mercantile Exchange at 8:30 a.m. local time. The more active February contract was down 8 cents to $60.77.
Brent for February settlement declined 7 cents to $66.10 a barrel on the London-based ICE Futures Europe Exchange, and traded at a $5.36 premium to WTI for the same month.
Other oil-market news
In fewer than two weeks, thousands of ships the world over will be forced to use fuel containing less sulfur in order to comply with global rules set out by the International Maritime Organization. See Bloomberg’s preview here.
A subsidiary of Vitol Group, the biggest independent oil trader, is demanding that the U.S. government return more than $52 million in fuel taxes the Rotterdam-based company says was improperly collected.
A campaign to increase tax revenues from Alaska’s biggest oil fields must be examined closely to make sure it doesn’t threaten an industry “renaissance” in the state, Governor Mike Dunleavy said.
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