U.S. crude oil points lower for Asia after unexpected build in weekly inventories

World currencies

U.S. crude oil prices extended declines in post settlement trade on Wednesday, pointing to a weaker open in Asia on Thursday as government figures showed a build in U.S. crude oil inventories and higher imports.

NYMEX West Texas Intermediate (WTI) eased 0.18 percent to US$64.89 a barrel. Overnight, ICE Brent settled down 2.35 percent to US$70.76 a barrel and NYMEX WTI dropped 3.03 percent to US$65.01 a barrel.

U.S. crude inventories rose by 6.805 million barrels for the week ended August 10, missing expectations for a draw of 2.449 million barrels, the U.S. Energy Information Administration said Wednesday, while also reporting crude oil imports rose by 1.341 million barrels per day (bpd). Exports fell by 2.58 million bpd.

At the same time, U.S. oil production rose for the first time in three weeks to 10.9 million bpd, compared with a record high 11 million bpd reported in late July, the data show.

Refinery operating rates in the U.S. reached 98.1 percent of capacity last week from 96.6 percent a week earlier on 18.0 million bpd of crude, up 383,000 barrels. Gasoline inventories fell by 6.805 million barrels, beating expectations for a draw of 583,000 barrels, while distillates rose by 3.566 million barrels, against expectations for a build of 964,000 barrels barrels.

Weaker emerging market currencies linked to concerns about Turkey’s ability to service dollar-denominated debts and pay for greenback-denominated commodities may weigh on sentiment. India and Indonesia are also in focus as currencies weaken in both countries. Indonesia surprised on Wednesday with a central bank interest rate hike to shore up the rupiah after it crossed 15,000 to the dollar this week. In India, shut for a holiday on Wednesday, the rupee fallen, crossing 70 to the dollar.

A growing trade spat between the U.S. and China has also unsettled the crude markets. China, one of the world’s top oil importers, has not loaded crude oil from the United States since the start of August, compared with imports of 300,000 bpd in June and July, potentially signaling it has shunned U.S. crude.

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