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Oil prices rise, reversing 2-day slide on scaled-back refinery output

Oil prices rise, reversing 2-day slide on scaled-back refinery output

Oil prices reversed a two-day slide Wednesday as U.S. refiners trimmed their output and violence in Nigeria stirred supply concerns.
Oil prices dropped to a seven-month low the day before as traders shrugged off calls by some OPEC members for output cuts.
The declines temporarily continued on Wednesday as U.S. government data showed rising inventories of crude, gasoline and distillate, which includes heating oil and diesel, and as no cut in output seemed imminent from OPEC.
Saudi Arabia's ambassador to the U.S. said he did not expect the Organization of Petroleum Exporting Countries to hold an emergency meeting to discuss prices ahead of its scheduled meeting on Dec. 14, Dow Jones Newswires reported.
Prince Turki said Saudi Arabia's intent was to "bring down prices to reasonable levels."
Still, buyers came back into the market Wednesday afternoon amid reports that armed men attacked a convoy in Nigeria's oil-rich southeastern delta.
Brig. Gen. Alfred Ilogho said the convoy was carrying supplies for Agip, a subsidiary of Italian oil company ENI SpA. He said he had no details on casualties.
Societe Generale's director of commodity strategy Michael Guido said that after dropping by more than $4 a barrel Monday and Tuesday the market had become "oversold."
Light sweet crude for November delivery rose 77 cents to $59.45 a barrel on the New York Mercantile Exchange.
Still, Nymex crude-oil futures have tumbled about 25 percent since a July peak above $78.
With economic growth slowing and oil supplies rising, energy markets have become less jittery about geopolitical tensions, such as the diplomatic standoff between Iran and the West over Tehran's nuclear ambitions. For much of the year, fear about potential sanctions against Iran, and possible retaliatory actions by OPEC's No. 2 supplier, had gripped the market.
A mild Atlantic hurricane season has also eased fears of disruptions to Gulf of Mexico oil and natural gas production.
BNP Paribas Commodity Futures broker Tom Bentz said that while OPEC has not stepped in yet to stem the decline in oil prices, they could before long.
"I don't think they want to see sub-$50 oil," Bentz said. "I imagine you're going to see some OPEC action soon... The question is, will that stop the fall?"
In its weekly report, the Energy Department said U.S. inventories of crude oil rose by 3.3 million barrels last week to 328.1 million barrels, or 6.7 percent above year-ago levels.
Gasoline inventories rose by 1.2 million barrels to 215.1 million barrels, or 9.6 percent more than last year.
Distillate inventories increased by 200,000 barrels to 151.5 million barrels, 18 percent above year ago levels.
U.S. refineries ran at 89.9 percent of capacity last week, down from 92.4 percent a week earlier.
In other Nymex trading, heating oil futures rose 1.91 cents to $1.6730 a gallon while gasoline futures gained 3.23 cents to $1.489 a gallon.
Natural gas futures rose 31.3 cents to $6.072 per 1,000 cubic feet.


Updated : 2021-06-14 21:22 GMT+08:00