Crude prices drop due to data on U.S. inventories

By Azernews

By Sara Israfilbayova

World oil prices declined on August 23 on the backdrop of the data from the American Petroleum Institute (API) that gasoline and distillate stocks in the U.S. have increased by more than 1 million barrels per week.

Brent crude futures, the international benchmark for oil prices, are at $51.75 per barrel, down 0.2 percent, from their last close, U.S. West Texas Intermediate (WTI) crude futures are at $47.72 a barrel, down 0.2 percent, Reuters reported.

The experts said that commercial oil reserves in the country (excluding the strategic reserve) for the week ended on August 18 decreased by 3.45 million barrels, or by 0.74 percent - to 463.05 million barrels.

The oil prices are also affected by news from Libya. The national oil company of Libya (National Oil Corp., NOC) reported that oil production at the country's largest field Sharara again suspended.

Sharara recently reached output of 280,000 barrels per day (bpd), but closed earlier this month due to a pipeline blockade. Its production is crucial to Libya's oil output, which surged above 1 million bpd in late June, about four times its level last summer.

Libya's rising output is a problem for OPEC, which together with non-OPEC producers agreed to cut oil output around 1.8 million bpd of supplies until March 2018.

"Sentiment towards oil remains bearish amid oversupply fears and the possible threat of OPEC's supply cut deal falling apart," said Lukman Otunuga, analyst at futures brokerage FXTM.

Meanwhile, the prospects of tropical storm Harvey on the coast of the Gulf of Mexico may lead to the increase of world oil prices.

The National Hurricane Center in Miami, Harvey has a 90 percent chance of turning into a full-fledged tropical storm by August 24, the National Hurricane Center in Miami warned.

On the coast of the Gulf of Mexico are about 30 oil refineries with a combined capacity of about 7 million barrels per day. Heavy rains are expected to begin on August 25.

These days the OPEC/non-OPEC Joint Technical Committee (JTC) meetings are being held in Vienna.

The next meeting of a ministerial committee of OPEC and non-OPEC states to discuss their production pact has been scheduled for September 22.