Oil prices down about half percent for the week

Oil prices down about half percent for the week

Whatever effect the EIA's figures have on prices is bound to be short-lived as oil's fundamentals remain largely unchanged, with rising US shale output offsetting OPEC's and its partners' cuts that should together take off 1.8 million bpd from global supply.

USA energy firms cut oil rigs for a second week in three, the Baker Hughes energy services firm reported, with drillers cutting spending plans in reaction to declining crude prices.

The price for Brent crude oil was up 0.2 percent at 9:15 a.m. EDT to $51.13 per barrel.

US total petroleum imports decreased 3.8 percent from June and decreased 6.2 percent from July 2016 to average just below 9.9 million barrels per day in July.

The overall economy in the USA showed gains in July, adding 209,000 jobs, according to the Bureau of Labor Statistics (BLS). While gasoline demand fell to an average of 9.7 million barrels per day, which was down by 0.3%, it was made up by explosive distillate demand that is averaging 4.3 million barrels a day up by 15.9% over a year ago as the USA manufacturing industry starts to sizzle.

The SPR, created to be a back-up supply of oil reserved for energy emergencies, contains about 678.9 million barrels of crude oil.

Markets will be influenced late Wednesday morning when the U.S. Energy Information Administration releases official figures on crude oil and gasoline inventories.

At 466.5 million bbl, crude stockpiles were at their lowest since January 2016.

Distillate stockpiles, which include diesel and heating oil, rose 702,000 barrels, versus expectations for a drop of 572,000 barrels, the EIA data showed. Net imports jumped by 364,000 barrels per day to 8.126 million barrels per day. The sudden rally in the USA production raised market concern once again regarding a possible global crude oversupply. Traders may already be looking further ahead, however, as the late September end to the official US summer travel season ends. For year-to-date, total domestic petroleum deliveries moved up 1.3 percent compared to the same period last year.

Futures are "finally catching up with some of the signs we've seen that the physical market is tightening", Clayton Rogers, an energy derivative broker at SCS Commodities Corp.in New Jersey, said.