Brent slips from $75/bbl as investors doubt rally will endure
* Poland, Germany halt Russian oil imports over quality
* Saudis, allies can compensate for Iran supply loss -
* Iraq says it has enough oil capacity to meet customer
* U.S. crude stocks at Oct 2017 high of 460.6 mln barrels -
* U.S. oil output, inventory, drilling: https://tmsnrt.rs/2DwTUBQ
(Updates prices and market activity to settlement, adds analyst
By Laila Kearney
NEW YORK, April 25 (Reuters) - Oil prices eased after Brent
touched $75 per barrel on Thursday for the first time in nearly
six months on the suspension of some Russian crude exports to
Europe as investors second-guessed the market's ability to rally
Brent crude futures settled at $74.35, losing 22
cents, or 0.30 percent, after rallying for most of the day to a
high of $75.60, the strongest since Oct. 31.
U.S. West Texas Intermediate crude settled at $65.21
a barrel, falling 68 cents, or 1.03 percent, after hitting a
session high of $66.28.
Prices began to slip just before the settlement in a
technical move, analysts said.
"I think the inability to hold $66 most of the day saw some
of the late-comers give up the ghost, so it was really a
technical move," said John Kilduff, a partner at Again Capital
LLC in New York. "There's just some fatigue in this market after
the spectacular gains."
Poland and Germany suspended imports of Russian crude via
the Druzhba pipeline, citing contamination. The pipeline can
ship up to 1 million barrels per day, or 1 percent of global
crude demand, and about 700,000 bpd of flow was suspended,
according to trading sources and Reuters calculations.
Russia, the world's second-largest crude exporter, said it
planned to start pumping clean fuel to Europe through the
pipeline on April 29.
U.S. crude inventories were also an overhang, analysts said.
"To a certain degree, the storage build yesterday was a
pretty big one, plus the first build in a couple weeks at
Cushing, has put some pressure on WTI," said Mizuho director of
futures Bob Yawger.
U.S. crude inventories <C-STK-T-EIA> last week rose 5.5
million barrels to their highest since October 2017 at 460.6
million barrels, as stocks at the Cushing, Oklahoma, delivery
hub for WTI rose 463,000 barrels, government data
showed on Wednesday.
The United States this week said it would end all exemptions
for buyers of Iranian oil. OPEC's third-largest producer has
been under U.S. sanctions for more than six months, but several
major buyers, including China and India, were given temporary
exemptions until this week. Beginning in May, those countries
have to halt oil imports from Tehran or face sanctions.
The decision follows supply cuts by the Organization of the
Petroleum Exporting Countries and non-member producers,
including Russia, since the start of the year aimed at propping
up oil prices.
Still, Brian Hook, U.S. special representative for Iran and
senior policy adviser to the secretary of state, said on
Thursday "there is plenty of supply in the market to ease that
transition and maintain stable prices".
Consultancy Rystad Energy said Saudi Arabia and its main
allies could replace lost Iranian oil.
The cuts led by OPEC are in part a response to ballooning
U.S. crude production <C-OUT-T-EIA>, currently at a record 12.2
million bpd, making the United States the world's biggest
(Reporting by Laila Kearney;
Additional reporting by Ahmad Ghaddar in London, Henning
Gloystein in Singapore; Editing by Marguerita Choy and Lisa
First Published: 2019-04-25 02:39:05
Updated 2019-04-25 21:25:32
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