Crude Stockpiles Drop, Oil Prices Fall

Prices rose 2 percent the day before to back above $50 a barrel.

U.S. West Texas Intermediate (WTI) crude futures were down 83 cents, or 1.6%, to $50.47 per barrel.

Brent crude futures, the worldwide benchmark for oil prices, were trading at $56.75 per barrel at 0649 GMT, up 14 cents, or 0.25 percent, from their last close. US light crude was down 67 cents to $50.63 a barrel. For 2018, oil demand is expected to rise by 420,000 bpd vs 400,000 bpd previously.

Crude inventories fell by 2.7 million barrels in the week to October 6, compared with analysts' expectations for a decrease of 2 million barrels. Distillate stockpiles, which include diesel and heating oil, fell by 1.5 million barrels, versus expectations for a 2.2-million-barrel decline, the EIA data showed.

Yesterday the EIA said it expects USA crude oil production in 2018 to rise by more than previously expected.

Prices dropped after the American Petroleum Institute reported on Wednesday that USA crude stocks rose by to 468.5 million barrels last week, disappointing expectations for a drop of 400,000 barrels.

This supports what I have been saying all along that prices are likely to remain rangebound until OPEC and other major producers vote to extend the production cuts beyond the May 2018 deadline and also decide to deepen those production cuts.

Traders have expressed concerns of late that the United States will at some point reach its export capacity, though that has not been hit yet.

The U.S. bank said oil supply and demand fundamentals meant it expected Brent to average $58 a barrel in 2018.