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NYMEX-U.S. crude falls below $94 on high stock build
September 18, 2014 / 12:42 AM / 3 years ago

NYMEX-U.S. crude falls below $94 on high stock build

SEOUL, Sept 18 (Reuters) - U.S. crude futures fell below $94 a barrel on Thursday in early Asian trade, pressured by an unexpected inventory build and a strong U.S. dollar, although the fall was capped by a Libyan oil field closure and strikes in Nigeria.

FUNDAMENTALS

* U.S. October crude extended losses by 44 cents a barrel to $93.98 as of 0023 GMT, after it settled 46 cents lower at $94.42 on the previous session.

* Brent November crude also shed 39 cents a barrel at $98.58 after it previously settled 8 cents lower at $98.97 a barrel, recovering from an intraday low of $98.51.

* The U.S. government’s Energy Information Administration data showed on Wednesday showed U.S. crude stocks unexpectedly rose last week as imports jumped and refineries cut output. U.S. crude inventories rose 3.7 million barrels in the week to Sept. 12, compared with analysts’ expectations for a decrease of 1.6 million barrels, the EIA data showed.

* The crude stock rise coincided with a 493,000-barrel-per-day increase in oil imports to 7.7 million bpd. The four-week import average is now the highest since November, the EIA data showed. Refinery utilization fell 0.9 percentage point but was still high at 93 percent of total capacity.

* The fall in the oil prices was initially triggered by the recent strength of the dollar, which makes commodities priced in dollars more expensive for buyers using other currencies.

* The dollar rallied on expectations of higher rates down the road after the Federal Reserve on Wednesday renewed its pledge to keep interest rates near zero for a “considerable time,” but also indicated it could raise borrowing costs faster than expected when it starts moving.

* OPEC may not need to cut its oil output target at a meeting in November, a Gulf OPEC delegate and other OPEC sources said on Wednesday, as strengthening demand in coming winter months should support oil prices that have fallen below $100 a barrel.

* On Tuesday, OPEC Secretary General Abdullah al-Badri said he expected the group’s production to be around 29.50 million bpd in 2015, not 30 million bpd. “I think our target will be lower, maybe by 500,000,” he said.

* Libya’s El Sharara field shut after a tank was damaged at the Zawiya refinery, which it supplies, in fighting between armed groups, an oil ministry official said on Wednesday, closing around 200,000 barrels a day of output.

* Nigerian oil unions continued a strike on Wednesday they said could affect exports if no agreement is reached with the government, although market sources said as yet no impact was being felt and some doubted it would.

MARKETS NEWS

* Stock markets around the world closed with modest gains on Wednesday after the U.S. Federal Reserve renewed a pledge to keep interest rates near zero for some time, while bond yields rose and the dollar rallied on expectations of higher rates down the road.

* The dollar hit a 14-month high and the benchmark U.S. 10-year Treasury note yield hit its highest level since July 7 after the Fed’s projections suggested that some officials see rates rising more quickly than the U.S. central bank projected three months ago.

DATA/EVENTS

* The following data is expected on Thursday:

DATA AHEAD (GMT)

0130 China House prices Aug

1230 U.S. Housing starts Aug

1230 U.S. Building permits Aug

1230 U.S. Weekly jobless claims

1400 U.S. Philly Fed business index Sep (Reporting by Meeyoung Cho; Editing by Richard Pullin)

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