Oil prices dipped in the latter part of Tuesday, November 1, as U.S. gasoline prices pared an early rally sparked by a pipeline blast and crude was also pressured by renewed doubts about whether OPEC will follow through with proposed output cuts, Reuters reports.
The American Petroleum Institute (API) reported U.S. crude stocks rose by 9.3 million barrels in the last week. Analysts had forecast that U.S. crude stocks had increased by more than 1 million barrels last week after unseasonal declines in seven of the past eight weeks also weighed on crude. The API report came ahead of official government data on Wednesday.
Brent January crude futures were down 64 cents, or 1.3 percent, at $47.97 a barrel by 4:50 p.m. ET (2050 GMT). They fell by nearly 3 percent the day before in their biggest one-day drop since Sept. 23.
U.S. West Texas Intermediate (WTI) futures settled down 19 cents, or 0.4 percent, at $46.67 a barrel, after a near-4 percent drop on Monday. They were lower after the settle following the API release.
Crude was up earlier, boosted as the U.S. dollar slid, making dollar-denominated oil cheaper for users of other currencies.
Crude was also helped by a gasoline rally after Colonial Pipeline Co shut its main gasoline and distillates pipelines following an explosion in Alabama. Gasoline futures jumped 13 percent, then pared gains on news Colonial had reopened another gasoline line.
“Oil rode up at first on the Colonial pipeline news, but that effect has faded,” said John Kilduff, partner at New York energy hedge fund Again Capital.
“All attention is back on OPEC’s failure thus far to put together a convincing production cut plan, and the possibility of higher U.S. crude stocks from here.”
Crude prices rallied about 15 percent over a three-week span after the Organisation of the Petroleum Exporting Countries proposed on Sept. 27 its first production cut in eight years to reign in a global oil oversupply. Brent hit one-year highs and
WTI 15-month peaks in early October as OPEC kingpin Saudi Arabia talked up the plan, inviting non-member producers such as Russia to make cuts too.
In the past two weeks, however, a growing number of OPEC member have said they were unwilling or unable to cut, casting doubts on what the group could do when it meets on Nov. 30 in Vienna.
