Crude lingers just under $ 54, sentiments weary - 3 Feb 2017

Oil is quoting mixed after hitting near three week highs. Prices are under pressure after every rally amid rising US inventories and continued profit selling pressure. WTI Crude is quoting just under $ 54 per barrel mark in Asia.

The latest Energy Information Administration (EIA) inventories data recorded a build of 6.5mn in the week ending January 27th. Consensus forecasts were for a build of 2.6mn, although markets were braced for a higher figure given the 5.8mn build reported in the American Petroleum Institute (API) data.

Cushing inventories recorded a build of 530,000 barrels compared with an expected draw for the week. Gasoline inventories registered a build of 3.87mn barrels compared with an expected build of 0.98mn, while distillate recorded a build of 1.57mn barrels.

There was a small decline in capacity use of 0.1 percent, while crude production declines to 8.92mn bpd from 8.96mn the previous week.

After reporting a sharp jump in US labor productivity in the third quarter, the Labor Department released a report on Thursday showing a continued increase in productivity in the fourth quarter.

The report said productivity climbed by 1.3 percent in the fourth quarter after surging up by a revised 3.5 percent in the third quarter. The US economic outlook remains uncertain due to the vague policy stance of the new administration and Asia faces downside risks such as financial volatility and rising protectionism in advanced economies, International Monetary Fund Deputy Managing Director Mitsuhiro Furusawa noted.

Meanwhile, US stocks continue to see a lackluster performance. The major averages spent the day bouncing back and forth across the unchanged line.

Asian equities are mostly lower on these cues and could weigh on oil ahead of weekend. MCX Crude oil closed at Rs 3,615 per barrel yesterday and should see a firm opening though rallies near yesterday’s high around Rs 3,660 could see selling pressure.

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