Oil Futures Settle Lower After Inventory Data

U.S crude oil

Oil set for biggest quarterly rise since 2009

Brent crude oil prices crept toward the key $70 level even as USA crude stockpiles swelled far above estimates and production hit a new high.

Despite the unexpected increase, oil prices were little changed after the report.

The brent crude rose to $69.11, while US crude tapped at $61.70, highrst since November 2018.

Six analysts polled by Reuters estimated, on average, that crude stocks fell by 1.2 million barrels in the week to March 29.

The OPEC+ reductions allayed concerns over an American Petroleum Institute report that was said to show a 3 million-barrel increase in USA crude inventories.

Oil prices could well break through the $70 level if official numbers from the US Energy Information Administration (EIA) reveal a reduction in US stockpiles and output, with the organisation scheduled to release its weekly report later on Wednesday.

Other oil-market news Saudi Aramco's bond prospectus revealed its giant Ghawar oil field can pump 3.8 million barrels a day, well below the more than 5 million that had become conventional wisdom in the market.

Crude's rebound this year - including the biggest quarterly gain in nearly a decade - has been a victory for the production cuts orchestrated by OPEC and its allies.

Brent futures fell five cents to $69.32 US mid-morning Wednesday.

USA crude production climbed 100,000 barrels per day (bpd) to a record 12.2 million bpd, after hovering around 12-12.1 million bpd since mid-February, according to the data from the Energy Information Administration.

Also start watching for the announcement of a U.S.

As the U.S.is pressuring countries to follow its lead on sanctions against Iran and Venezuela, low output from both countries are fueling the rise in oil prices.

Commerzbank said in a note that the EIA could further revise down USA production, after the agency last put January output at 11.9 million bpd, down 100,000 bpd from the previous month.

"We hear a lot of stories about long term substitution of oil demand by electricity: some of it will be fair, a lot of it will come through, but it's going to take a long time, and in the meantime demand remains robust, especially in the emerging markets which continue to buy a lot of crude".

However, analysts say it remains unlikely that that Trump administration will not renew some of the waivers, despite officials continuing to speak publicly about zeroing out Iran's crude exports.

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