Oil cools after biggest gain since Saudi attack on US supplies

Oil pared gains after surging the most since the attacks on Saudi Arabia following a surprise decline in US crude stockpiles.

Futures dropped 0.6% in New York after advancing 2.7% on Wednesday. American crude inventories shrank by 1.7 million barrels last week, compared with a forecast 3-million barrel gain in a Bloomberg survey. Gasoline supplies fell more than forecast and imports of foreign oil slid to the lowest in more than two decades, according to the Energy Information Administration.

Oil is still down more than 15% from an April peak as the prolonged trade dispute between Beijing and Washington dented global demand. Russia’s energy minister Alexander Novak said none of the OPEC+ members have submitted a proposal to change existing conditions of their output-curb deal, following a Reuters report Tuesday that the group may be considering deeper cuts.

Demand growth “is likely to remain the most entrenched and enduring narrative in the oil market until the US and China put their trade war behind them.” said Vandana Hari, the founder of industry consultant Vanda Insights in Singapore. “A synchronized decline in crude and product inventories in the US is unlikely to be repeated in the coming weeks.”

West Texas Intermediate for December delivery lost 33 cents to $55.64 a barrel on the New York Mercantile Exchange as of 7:38 a.m. in London. The contract added $1.49 to close at $55.97 on Wednesday, the biggest gain since Sept. 16.

Brent for December settlement fell 16 cents, or 0.3%, to $61.01 a barrel on the London-based ICE Futures Europe Exchange. The contract rose $1.47 to $61.17 on Wednesday. The global benchmark crude traded at a $5.35 premium to WTI.

Total US stockpiles of crude and petroleum products, excluding the strategic petroleum reserve, fell by 9 million barrels last week, to the lowest level since May. Gasoline inventories dropped for a fourth week as demand for the motor fuel rose to its highest since at least 1991 on a seasonal basis.

Demand woes still persist in Asia, the biggest demand center for oil. South Korea’s economy grew at a slower pace in the third quarter, while China last week reported the slowest pace of economic growth since the early 1990s.

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