Oil struggled to acquire gains on Wednesday as investors are currently digesting the unexpectedly weak gasoline stocks in the United States. They are also anticipating the results of the meeting between OPEC and non-OPEC members.
Global benchmark Brent crude oil fell more than 22 cents to trade at $53.93 per barrel. U.S. light crude oil dropped as much as 11 cents to finish at $51.36 per barrel on Wednesday’s session. Brent and crude added 10 percent from their declines this month below $50 per barrel as both recouped on an accord that OPEC and other countries will continue to curb output to reduce the bloated oil market.
Crude oil stockpiles in the U.S. slipped for seven weeks straight as refiners processed a huge amount of crude on the previous week. Distillate and gasoline stocks also fell, according to the Energy Information Administration (EIA) last Wednesday. Inventories dropped more than 4.4 million barrels in the week since May 19, higher compared to the 2.4 million barrels the analysts forecasted. However gasoline stockpiles surpassed expectations after falling by only 787,000 barrels versus the predicted 1.2 million drop.
The said data was released ahead the meeting. The Organization of the Petroleum Exporting Countries has pledged an output cut by 1.8 million barrels per day until next month and to further extend for nine months on Thursday.
According to a BMI research, the cuts made by OPEC would only stabilize the market, but starting next year onwards, markets will go back from being bloated.