Brent crude futures, the worldwide benchmark for oil prices, were down 78 cents, or 1.4%, at $56.16 late morning Thursday.
The monthly OPEC oil market report noted that, based on secondary sources, Angola produced 1.641 million barrels in September, a monthly drop of 2,900 barrels, while Nigeria increased production by 50,800 barrels to 1.855 million barrels. Distillate stockpiles, which include diesel and heating oil, fell by 1.5 million barrels, versus expectations for a 2.2-million-barrel decline, the EIA data showed. Both benchmarks have risen more than 20 percent from their lows in June as world oil markets tightened. The lowering of 2017 growth expectations should have been price-supportive, especially for WTI, but with this year nearing an end, attention will shift more to the output expectations for 2018, which at this point are bearish.
Meanwhile, traders also focused on oil inventory data.
OPEC and other producers including Russian Federation agreed a year ago to reduce output by 1.8 million barrels per day (bpd) to prop up prices and the cuts, from January, have helped drain inventories. Platts survey showed analysts expecting a draw of 1.4 million barrels in gasoline and a draw of 1.64 million barrels in distillate stocks.
A USA federal holiday on Monday delayed the release of weekly inventory numbers by a day.
"This means OPEC must deepen its production cuts to finish its job of bringing oil stocks back to the five-year average", Fritsch said.
Chinese oil imports fell by 179,000 barrels a day in August, but remained above 8 million barrels a day.
US crude inventories are still 13 percent above five-year averages headed into the busy winter season, despite efforts by OPEC to cut production. From this we can conclude that the outlook for the market over the near-term is likely to be bearish because of the forecast for lower oil demand in 2018.
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