Oil prices settle lower after United States crude stocks rise

Oil rises amidst expected extension of OPEC cuts

Early yesterday, Brent crude, the global benchmark dropped to $61 from the $64 recorded on November 7.

Crude stocks at the Cushing, Oklahoma, delivery hub fell by 1.5 million barrels, EIA said.

The West Texas Intermediate for December delivery was down 0.37 USA dollar to settle at 55.33 dollars a barrel on the New York Mercantile Exchange, while Brent crude for January delivery lost 0.34 dollar to close at 61.87 dollars a barrel on the London ICE Futures Exchange.

Oil prices dropped on Wednesday after the US government reported an unexpected increase in crude and gasoline stockpiles, but an increase in refining runs and a drawdown in distillates helped prices bounce off session lows. The American Petroleum Institute on Tuesday had reported a 6.5 million-barrel climb, according to sources.

OPEC, along with several other major producers including Russian Federation, first agreed a year ago to reduce production by 1.8 million barrels a day from peak October 2016 levels, with the aim of alleviating global oversupply and boosting prices.

Expectations that the Organization of the Petroleum Exporting Countries will agree to extend their supply-cut pact with other major world producers in Vienna on November 30 has offset some of the recent pressure on prices.

The deal participants are set to convene in Vienna on November 30 to assess the progress of the deal and debate the possibility of an extension.

Oil prices settle lower after United States crude stocks rise

IEA reduced its oil demand growth forecast by 100,000 barrels per day (bpd) for 2017 and forecast 1.3 million bpd oil demand for 2018.

The EIA reported that gasoline stockpiles unexpectedly rose by 900,000 barrels last week, and distillate inventories fell by 800,000, more than analysts had predicted.

OPEC is expecting that inventories would rapidly go down by 670,000 barrels a day through the year if they maintain the supply limit.

Despite the three day consolidation, I think there is enough downside momentum to drive January WTI crude oil into its value zone at $54.62 to $53.78 and February Brent into $60.36 to $59.40.

Gasoline was trading down as well, -2.15 percent at $1.74.

"Overall, the report is somewhat supportive because it was not as bearish as the previous API report last night - that is why we are slowly digging our way out of the downside seen earlier this morning", said Phil Flynn, senior energy analyst at Price Futures Group in Chicago.

-Christopher Alessi contributed to this article.