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Oil prices inch lower on increases in US crude inventories, production

Oil prices inched lower on Thursday, pressured by an unexpected increase in US crude inventories and as oil output and exports from the United States rose last week.

Brent crude for December delivery was down 4 cents at $58.40 a barrel by 0523 GMT. The contract gained only 0.2 percent on Wednesday, supported by comments from Saudi Arabia’s energy minister on Tuesday reiterating its determination to end a global supply glut.U.S. West Texas Intermediate crude for December delivery was down 5 cents at $52.13, after ending the last session down 29 cents, or 0.6 percent.U.S. crude inventories rose by 856,000 barrels last week, U.S. Energy Information Administration data showed on Wednesday. Analysts had expected a decrease of 2.6 million barrels.RELATED NEWSHere are commodity trading ideas from Navneet DamaniSugar in focus; stockholding limit extendedU.S. gasoline and heating oil futures contracts rallied after the EIA data showed inventories of gasoline and distillate fuel, which includes heating oil and diesel, both fell by more than 5 million barrels. The fuel inventories dropped despite a rise in refining output.

“The market is losing its direction a little bit due to a mix of positive and negative factors,” said Takayuki Nogami, Chief Economist at Japan Oil, Gas and Metals National Corp in Tokyo.

Bullish factors include the big fall in U.S. gasoline and distillate stockpiles at a time when the Northern Hemisphere enters winter heating season, he said.

On the other hand, a 1.1 million barrel per day (bpd) rebound in U.S. crude production to 9.5 million bpd after the falloff due to Hurricane Nate the week before fuelled a sustained strong production outlook that weighed on oil prices, he added.

Some of the concern around oil exports from the northern part of Iraq may ease after Kurdish authorities offered to suspend their independence referendum and proposed an immediate ceasefire, Nogami said.

Crude shipments from northern Iraq, the second largest producer in the Organization of the Petroleum Exporting Countries, to Turkey have declined after Iraqi government forces took back the city of Kirkuk last week after the referendum.

Southeast Asia’s net crude oil imports will more than double to 5.5 million bpd by 2040 as the region adds new refining capacity to meet rising demand while regional oil output falls, according to the International Energy Agency (IEA).