Oil falls on U.S. crude
stock rise, Venezuela warning
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[September 20, 2016]
By Karolin Schaps
LONDON (Reuters) - Oil prices edged
lower on Tuesday ahead of an expected build in U.S. crude oil stocks
and on Venezuelan comments that the oil market remains oversupplied
by 10 percent.
Analysts polled by Reuters expect U.S. commercial crude oil
inventories to have risen 2.3 million barrels in the week to Sept.
16, paving the way for a bearish market reaction because a rise in
stocks indicates growing oversupply. [EIA/S]
The American Petroleum Institute (API) is scheduled to release its
weekly crude stocks data at 2030 GMT on Tuesday.
Brent crude oil futures were trading at $45.45 per barrel at
1128 GMT, down 50 cents day on day and a near three-week low.
U.S. West Texas Intermediate (WTI) crude futures were down 44 cents
at $42.86 a barrel.
Oil prices also reacted to comments made by Venezuela's Oil Minister
Eulogio Del Pino on Monday that global oil supply of 94 million
barrels per day (bpd) needs to fall by about a tenth if it is to
match consumption.
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Members of the Organization of the Petroleum Exporting Countries
(OPEC) and other oil producers are set to hold an informal gathering
in Algiers next week, which the oil market hopes could lead to an
agreement to freeze production levels.
Algeria's Energy Minister Noureddine Bouterfa said on Tuesday he was
"optimistic" participants would reach consensus on how to prop up
the oil market.
"I would not be surprised to see some short-covering in the second
half of this week just ahead of the informal OPEC meeting," said
Tamas Varga, lead oil analyst at London brokerage PVM Oil
Associates.
Official data released late on Monday confirmed a rise in Saudi
Arabian oil exports in July to 7.622 million bpd, up from 7.456
million bpd in June.
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![](../images/092016pics/busine31.jpg)
An oil pump is seen in Lake Maracaibo, in Cabimas, Venezuela, August
13, 2016. REUTERS/Jesus Contreras
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"(An output freeze) would only secure an even higher push of Saudi crude oil and
would be a case where the proposed cure is worse than the disease," said Olivier
Jakob, managing director of PetroMatrix in Switzerland.
A fire at Saudi Arabia's Ras Tanura oil terminal which broke out on Tuesday
morning and injured eight people did not affect operations and was extinguished,
operator Saudi Aramco said.
Technical market indicators were also weak, with WTI likely to test support at
$42.78 per barrel soon, after which a fall towards $42 would be likely,
according to Reuters analyst Wang Tao.
For Brent, he said prices may test support at $45.63 per barrel and, failing to
hold that level, could fall to just over $45 a barrel.
(Additional reporting by Henning Gloystein in Singapore; editing by Alexander
Smith and Jason Neely)
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