Despite the price drop, the extension of the OPEC and allies' production cut deal through the end of 2018 continues to sent a stronger signal that the oil market rebalancing could speed up and send WTI oil prices to average $54.78 a barrel in 2018, up from a previous projection of $52.50, a Reuters poll of 30 analysts and economists showed on Wednesday.
On December 5, 2017, the API (American Petroleum Institute) published its crude oil inventory report.
US crude inventories dropped by 5.48 million barrels last week, the API said Tuesday, according to people familiar with the data.
Oil prices came under pressure Tuesday when the Organization of Economic Cooperation and Development said inflation moved lower for the world's major industrialized economies.
OPEC and 10 major producers outside the cartel, including Russian Federation, agreed Thursday to extend a deal to hold down crude output by almost 2% through the end of next year.
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West Texas Intermediate for January delivery was at $56.88/bbl on the New York Mercantile Exchange, down 74 cents, at 1:31 p.m. London time. Total motor gasoline supplied (the agency's proxy for demand) averaged 9.1 million barrels a day for the past four weeks, up by 0.5% compared with the same period a year ago. WTI settled at $57.62 on Tuesday and opened at $57.45 Wednesday morning. Crude prices have risen more than 20% since September.
Distillate inventories also saw a build this week, rising 4.259-million barrels, against a forecast of a 548,000-barrel build.
According to traders, the EIA report is expected to show a draw of 3.2 million barrels. Over the past 12 months, Exxon stock has traded down about 5.1%. The EIA will release the crude oil inventory report today (December 6, 2017).
The accord was first struck a year ago with the aim of draining the global oil glut and boosting prices.