USA crude slips on inventory build, gasoline rallies

USA crude slips on inventory build, gasoline rallies

USA crude slips on inventory build, gasoline rallies

Oil prices were little changed after erasing earlier losses by midday on Thursday as Middle East tensions and Saudi comments about ending a global supply glut offset an unexpected increase in U.S. crude inventories and high USA production and exports.

But the outlook has shifted in recent weeks, with oil prices posting weekly gains three weeks in a row.

The spread, or difference, between Brent and WTI means USA oil is more competitive against other benchmarks in some markets.

"It's been a slow train coming", said Mark Benigno, co-director of energy trading at INTL FCStone, but investors have come around to the idea that OPEC's efforts are paying off. "People wrote off the story like, 'forget OPEC.' But it's happening the way they were hoping it would", Mr. Benigno said.

What they said: At a major investment conference in Riyadh, Saudi oil minister Khalid al-Falih said worldwide demand for oil is expected to grow by 45 percent by 2050, Reuters reports. "The underlying fundamentals keep nudging us higher".

Minister Khalid al-Falih, told Reuters at an investor conference in Riyadh on Tuesday that global oil demand is expected to grow by 45 percent by 2050 despite an worldwide push for using more renewable sources of energy.

The disruption to exports from Iraq, the second-largest producer in OPEC, has supported the market and should give the group's already high compliance with the cutback agreement a boost in October.

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USA oil exports hit all-time high this week and, after a brief respite, look set to rise to their highest on record into north west Europe, as the discount of US crude to Brent sits at two-year highs, casting a shadow over the North Sea market.

"Everyone is looking forward to the OPEC meeting at the end of next month", said Thomas Pugh, a commodities economist at Capital Economics.

Battle with shale: In separate comments, Saudi Aramco CEO Amin Nasser "says he does not spend much time worrying about booming production from USA shale fields", according to CNBC.

Saudi Arabia and Russian Federation declared their support for extending an OPEC-led deal to cut supplies for another nine months, the Organization of the Petroleum Exporting Countries' secretary general said ahead of the group's next policy meeting on November 30.

"Momentum may take us a little further here but longer term, I would expect a supply response here domestically", said Rob Haworth, senior investment strategist at U.S. Bank Wealth Management.

The pact runs until March 2018 and the countries are now considering extending it.

RBOB futures rose 1.1 per cent to $1.7341 a gallon. Diesel futures rose 2.5 cents, or 1.36%, to $1.8669 a gallon - its highest settle value since June 30, 2015.

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