NEW YORK-Oil prices fell Friday on skepticism that a large drop in US inventories last week marks the beginning of a trend. China's crude imports surged to a record this year and the share of overseas supply in the country's mix has risen as high as 66%.
The Organization of the Petroleum Exporting Countries and non-OPEC producers such as Russian Federation are expected to discuss the issue at informal talks in Algeria on September 26-28.
The narrowing gap between refiner crude oil acquisition costs for US and global refiners is a key factor driving the convergence in refinery profits.
North American refiners enjoyed a large discount to global crude oil prices for several years, measured by the difference between North Sea Brent crude oil prices and the US composite refiner acquisition cost.
Schieldrop said the market was in fact moving away from a supply glut situation, with inventories expected to fall next year and beyond.
The surprise drawdown jolted late-day trading in crude, as US futures jumped sharply to $46.17/bbl, doubling the day's gains to almost 3% in after-market trade.
Oil prices shot up on Thursday after USA government data showed the biggest weekly drop in stockpiles last week since January 1999 as Gulf Coast imports slumped to the lowest on record.
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For more on OPEC's crude oil production, read How Rising OPEC Crude Oil Production Is Affecting Oil Market and How Did OPEC's Crude Oil Production Trend in August 2016?
If the report on September 8 from the U.S. Energy Information Administration shows a similar decline, it would be the largest one-week fall in stocks excluding the U.S. strategic petroleum reserve since April 1985, according to government data. Oil supply outages averaged 2.4 million bpd across OPEC members in August, up by 100,000 bpd from July, with Nigeria and Libya accounting for most of the crude supply disruptions.
Brent for November settlement climbed as much as 86 cents, or 1.8 percent, to $48.84 a barrel on the London-based ICE Futures Europe exchange.
Gasoline stocks fell 4.211 million barrels to 227.793 million barrels, 8.2% above the five-year average for the same reporting week, down from a cushion of 10.5% a week ago. Chevron (CVX) rose 0.9%.
Distillate stockpiles, which include diesel and heating oil, rose 3.4 million barrels, versus expectations for a 684,000-barrel increase, the EIA data showed.
An attempt to jointly freeze production levels earlier this year failed after Saudi Arabia backed out over Iran's refusal to take part of the initiative, underscoring the difficulty for political rivals to forge consensus.
