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Oil steady after surprising increase in USA crude exports

Oil steady after surprising increase in USA crude exports

The EIA (U.S. Energy Information Administration) will release its weekly crude oil and gasoline inventory report on October 4, 2017, at 10:30 AM EST.

A recovery in USA crude exports and falling European refining margins have sent prices of North Sea barrels tumbling, which may encourage traders to keep oil in storage and could undermine OPEC's efforts to drain inventories.

Crude inventories fell 6 million barrels in the week to September 29, compared with analysts' expectations for a decrease of 756,000 barrels.

After hitting over $58 per barrel, Brent crude oil, the global benchmark of the commodity, fell to around $56 p/b at the end of Monday's USA trading session.

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Crude oil prices were moving closer to even moments before the opening bell in NY. In addition to the possible increase in supply from OPEC, the number of active USA oil rigs also rose during the final week of September. In contrast, distillate inventories registered a draw of 0.58 million barrels after a substantial draw of 4.53 million barrels in the week ending September 22. The US benchmark posted its strongest quarterly gain since the second quarter of 2016. Prices followed suit in the physical market, which uses Brent as a benchmark.

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WTI light swet crude oil was down 17 cents at USD50.42 a barrel.

Plus, end of last week, the Al Mazrouei's department announced increase of fuel prices because of the increase of crude oil price on the global market.

Oil prices fell on Wednesday, pulled down by caution that rising USA crude output could scupper a rally that lasted for most of the third quarter. Also, Russia and OPEC's production cut agreement is set to expire in March 2018. In developed countries, commercial stockpiles fell in July to 190 million barrels over the five-year average, compared with a 302 million-barrel surplus in January, according to the International Energy Agency.

Observers said a market rebalancing was well underway as a result of strong consumption and output cuts led by the Organisation of the Petroleum Exporting Countries.

US crude inventories probably fell by 500,000 bbl last week, according to the median estimate in a Bloomberg survey.

Still, even the most bullish traders believe the Organization of Petroleum Exporting Countries and its allies, which include Russian Federation and Mexico, need to extend output cuts that are set to expire at the end of March 2018 to avoid a build-up in inventories.