Oil prices fell on European markets on Wednesday after a correction and profit taking after yesterday’s biggest daily gain since last June, amid expectations that strong rally will continue in the coming trading session. The US government is cutting production expectations, along with concerns about the hurricane of Florence, which is preparing to hit the US east coast.
By 09:00 GMT US crude fell to $ 69.60 per barrel from the opening level of $ 69.87, recording a high of $ 70.13 and a low of $ 69.56.
Brent crude fell to $ 79.00 a barrel from the opening level of $ 79.44, recording a high of $ 79.64, and a low of $ 78.93.
US crude gained 3.5% on Friday, its first gain in six days, with the biggest daily gain since June 26. Brent contracts rose 2.8%, the third daily gain in a row, with the biggest daily gain in nearly three months.
In preliminary data, US Petroleum Institute announced yesterday that the country’s trade inventories fell by 8.6 thousand barrels in the week ending September 7, the biggest weekly drop since June, the second consecutive weekly decline, exceeding experts’ expectations of a decline of about 0.8 million barrels.
According to the data, total US commercial inventories fell to 395.9 million barrels, the lowest in more than three years, in a positive sign of demand levels in the world’s largest oil consumer.
Traders are looking for official data on commercial stocks and production levels later in the weekly report of the US Energy Agency, and expectations are for inventories to fall by 1.3 million barrels, the fourth consecutive weekly decline.
US Energy Agency said on Tuesday that US crude oil production averaged 10.66 million bpd in 2018, down from the previous estimate of 10.68 million barrels.
For 2019, the US Agency expects production to average 11.5 million barrels per day, down from previous estimates of 11.7 million barrels.
Oil traders are closely watching the hurricane of Florence, which is preparing to hit the US east coast on Friday, which threatens to disrupt fuel supplies in North Carolina.