Oil Price Rally Slows

Oil retreated from this week’s eight-week highs above $52 a barrel on Wednesday, following a bearish combination of rising US inventories, an outage at a major European refinery and increasing OPEC production.

Brent crude futures were down 11 cents at $51.67 a barrel, having touched a session low of $51.18. The price hit $52.93 on Monday, the highest since late May. US West Texas Intermediate crude also fell 11 cents to $49.05 a barrel, Reuters reported.

Both contracts dropped sharply the previous day after Royal Dutch Shell said its 400,000-barrel-per-day Pernis refinery in the Netherlands would remain offline for at least the next couple of weeks following a fire.

Adding to the pressure from Europe’s largest refinery being out of action was an unexpected rise of 1.8 million barrels in US crude inventories, which dented bullish hopes that recent inventory draws signified a tightening US market.

Production from the Organization of Petroleum Exporting Countries hit a 2017 high of 33 million bpd in July, despite the group’s pledge to restrict output along with other non-OPEC producers, including Russia, by 1.8 million bpd between January this year and March 2018.

“OPEC output numbers in July were at eight-month highs; not good,” said Matt Stanley, a fuel broker at Freight Investor Services in Dubai.