Oil prices wobbled Wednesday after the Energy Department reported a surprise drop in crude stockpiles in the prior week and an increased in domestic production.
After briefly rising, futures reversed lower with U.S. crude closing down 2.9% to $43.58 per barrel.
The Energy Information Administration said U.S. commercial crude inventories fell by 559,000 barrels in the week ending Sept. 9, to 510.8 million barrels. Late Tuesday, the American Petroleum Institute, an industry group, reported a stockpile increase of 1.4 million barrels. Analysts were expecting a 3.8 million rise.
The decline comes after the largest weekly crude stockpile draw since 1999 in the prior week. Analysts had expected crude stocks to make a sharp rebound as the massive drop came while many refineries on the Gulf Coast were shut down during Hurricane Hermine.
But U.S. production rose by 0.4% to 8.493 million barrels per day.
Exxon Mobil (XOM) shares fell 0.7% in afternoon trading in the stock market today. BP (BP) shares lost 0.4%. Royal Dutch Shell (RDSA) dipped 0.8%. Chevron (CVX) eased 0.8% as well.
Also Wednesday, the International Energy Agency launched its inaugural World Energy Investment report, which found that investment in the energy sector last year fell 8% year-over-year to $1.8 trillion. Investment in U.S. energy sector plunged nearly 20% to $280 billion. China was the top energy investor.
Upstream oil and gas spending fell by 25% last year to $583 billion, and the IEA estimates a 24% drop this year. But it sees upstream spending stable or declining "slightly" in 2017.
The Middle East and Russia were the "most resilient regions to spending cuts," according to the report, with national oil companies accounting for 44% of total upstream investment.
By: Gillian Rich (Investor's Business Daily).
Photo: Gossip News Hub.
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