Phil Flynn is writer of The Energy Report, a daily market commentary discussing oil, the Middle East, American government, economics, and their effects on the world's energies markets, as well as other commodity markets. Contact Mr. Flynn at (888) 264-5665
[Gillian Rich, Investor’s Business Daily]
l prices and energy stocks pared gains Wednesday after government data showed a surprise increase in U.S. oil inventories and a continued rise in production.
The Energy Information Administration said stockpiles grew by 1.6 million barrels last week. Gasoline inventories fell by 600,000 barrels and distillate fuel inventories declined by 500,000 barrels.
Late Tuesday, the American Petroleum Institute, an industry group, said U.S. crude stockpiles fell by 1.3 million barrels, while analysts were expecting a drop of just 200,000 barrels.
Meanwhile, U.S. crude production rose to 9.2 million barrels a day last week from 9.147 million barrels in the prior week.
U.S. crude was up 0.9% at $51.47 per barrel. Brent added 0.8% to $54.63. Earlier, an outage at the Buzzard field in the North Sea lifted prices higher, according to reports.
Dow Jones industrial components Exxon Mobil (XOM) and Chevron (CVX) climbed 1% and 1.3%, respectfully on the stock market today. Among shale producers, Continental Resources (CLR) edged up 0.4%, EOG Resources (EOG) rose 0.6%, and Diamondback Energy (FANG) dipped 0.4%.
The rise in U.S. crude inventories comes as OPEC considers extending its production cut another six months as U.S. stockpiles still haven’t fallen as much as anticipated.
“OPEC and non-OPEC will extend cuts. More than likely players without a quota will agree to one to get a big-time rise,” wrote Phil Flynn, a senior market analyst at the Price Futures Group, in his morning energy report.
Flynn also wrote that he doesn’t see U.S. production making up the shortfall from the OPEC cuts.
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