Oil prices plunge 3 per cent on US inventory build
NEW YORK - Oil prices sank by roughly $3 a barrel on Wednesday after industry data showed that US crude stockpiles rose more than expected and on concerns that a rebound in COVID-19 cases in top importer China would hurt fuel demand.
Brent crude futures settled at $92.65 a barrel, shedding $2.71, or 2.8 per cent, while US West Texas Intermediate (WTI) crude futures settled at $85.83 a barrel, dropping $3.08, 3.5 per cent. The benchmarks fell around 3 per cent on Tuesday.
US crude in storage jumped by 3.9 million barrels last week to 440.8 million barrels as oil production increased to about 12.1 million barrels a day, US Energy Information Administration data showed. Analysts in a Reuters poll had expected a stockpile rise of 1.4 million barrels.
“The report was once again mixed but tilted towards bearish, with the crude oil build and the jump in domestic production,” said John Kilduff, partner at Again Capital LLC in New York.
US gasoline stocks were down by 900,000 barrels in the week to 205.7 million barrels, the EIA said, compared with analysts’ expectations in a Reuters poll for a drop of 1.1 million barrels. Distillate stockpiles, which include diesel and heating oil, fell by about 500,000 barrels, a smallerthan-expected decline.
“Adding to downside pressure is the continued concerns over the future Chinese economic growth path that could prompt adjustment of global oil demand views,” Jim Ritterbusch, of Ritterbusch and Associates, said in a note.
Last week, the market had latched onto hopes that China might be moving toward relaxing COVID-19 restrictions, but over the weekend health officials said they would stick to their “dynamic-clearing” approach to new infections.
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