Oil price drops as US inventory hits a record

Oil price drops as US inventory hits a record

Representative image. (Reuters photo)

Oil prices fell on Thursday, extending losses from the previous session after official data showed US crude and gasoline stocks rose against expectations and production hit a record.

Brent crude futures were down 16 cents, or 0.3%, at $63.90 a barrel by 0141 GMT, having dropped 0.3% on Wednesday.

US West Texas Intermediate crude fell 21 cents, or 0.4%, to $57.90, after falling 0.5% in the previous session.

Crude stockpiles in the United States swelled 1.6 million barrels last week as production hit a record high of 12.9 million barrels per day (bpd) and refinery runs slowed, the Energy Information Administration said. Analysts in a Reuters poll had forecast an inventory drop of 418,000 barrels.

More bearish was a 5.1 million-barrel rise in gasoline stocks, compared with forecasts for a 1.2 million-barrel gain.

Oil prices had risen earlier this week on expectations that China and the United States, the world's two biggest crude users, would soon sign a preliminary agreement, putting an end to their 16-month trade dispute.

"The stock data overshadowed other supply-side issues and a general pick-up in sentiment regarding the US-China trade deal," ANZ Research said in a note.

Forces based in eastern Libya said on Wednesday they had driven rival factions from the 70,000-bpd El Feel oilfield after attacking the area with air strikes, leading to production being halted and raising some worries about supply.

In the United States as well, energy services company Baker Hughes reported that US oil drillers reduced the number of drilling rigs for a record 12 months in a row.

Drillers cut three oil rigs in the week to Nov. 27, bringing the count down to 668, lowest since April 2017, Baker Hughes said in its report released a day early due to the US Thanksgiving holiday.