Oil prices fall amid rising fuel inventories

Oil ETF Engaged in a Familiar Struggle

Alternative ETFsOil ETF Engaged in a Familiar StruggleByBrenton Garen

This week, oil prices have been a mixed bag of ups and downs, and on Wednesday they dropped shortly after the Energy Information Administration (EIA) reported a 5.6-million-barrel draw in crude oil inventories for the week to December 1, but a major build in gasoline inventories of 6.8 million barrels.

Brent crude settled up $1.20 or 1.9 percent at $63.40 a barrel.

Brent crude futures, the worldwide benchmark for oil prices, were down 34 cents, or 0.5 per cent, at $63.06 a barrel. After expressing doubt that USA gasoline supplies jumped during the Thanksgiving holiday break, Flynn said on Wednesday that "it is very disturbing that week after week we have to continue to question the accuracy of these weekly figures".

Preventing prices from sliding further was booming oil demand from China, which will this year overtake the United States as the world's biggest crude importer. "Iran, Russia and the USA are some of the countries picking up the slack".

Even the fact that US crude still posted its biggest weekly loss in two months wasn't enough to dissuade analysts from offering optimistic near-term forecasts: "Even if you have no bullish view".

Governor Jerry Brown tours Thomas Fire zone in Ventura County
Officials said that by Saturday the Thomas Fire had charred 148,000 acres (59,893 hectares), an area about the size of Chicago. The 421-acre Skirball Fire, which broke out Wednesday in the Bel Air neighborhood of Los Angeles, was 75 percent contained.

"Generally speaking, the market is looking more healthy than sick", said Tamas Varga, analyst with PVM Oil Associates.

Rising U.S. output threatens to undermine efforts led by the Organization of the Petroleum Exporting Countries (OPEC) and a group of non-OPEC producers, including Russian Federation, to support prices by withholding supplies.

A report from the Energy Information Administration (EIA) on Wednesday showed a surprising increase in gasoline prices, along with an expected decline in US oil supplies.

Drillers boosted the rig count by two to 751, a three-month high, according to Baker Hughes data on Friday.

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