Oil Declines as Industry Report Shows Sizable US Stockpile Build

Oil Declines as Industry Report Shows Sizable US Stockpile Build

Oil extended a modest decline after an industry report pointed to a sizable build in US inventories, and wider markets struck a weaker tone ahead of the end of the quarter.

Author of the article:

Bloomberg News

Yongchang Chin

Published Mar 26, 2024  •  1 minute read

Storage tanks at the Midway-Sunset Oil Field near Derby Acres, California, U.S., on Friday, April 29, 2022. Oil is poised to eke out a fifth monthly advance after another tumultuous period of trading that saw prices whipsawed by the fallout of Russia’s war in Ukraine and the resurgence of Covid-19 in China. Photo by Ian Tuttle /Bloomberg

(Bloomberg) — Oil extended a modest decline after an industry report pointed to a sizable build in US inventories, and wider markets struck a weaker tone ahead of the end of the quarter.

Brent crude fell below $86 a barrel after a 0.6% decline on Tuesday, while West Texas Intermediate was near $81. The industry-funded American Petroleum Institute said nationwide stockpiles expanded by 9.3 million barrels last week, according to people familiar with the data. The API also reported a 2.4 million barrel increase in crude volumes at the key hub at Cushing, Oklahoma, although gasoline stockpiles shrank.

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If confirmed by government data due later Wednesday, levels of crude at Cushing would have posted the biggest weekly gain in barrel terms since January 2023. Meanwhile, gasoline inventories would have fallen for an eighth week, the longest run of declines in almost a year.

Broader financial markets were weaker, weighing on crude and other commodities. Equity markets in Asia were set for a muted open after US benchmarks wiped out gains in the final half hour of trading as investors rebalanced their portfolios.

Oil has risen after breaking out from a tight range that held for the year’s first couple of months. Geopolitical uncertainty amid Ukrainian drone attacks on Russian oil infrastructure and OPEC+ supply cutbacks have buoyed prices, although a challenging economic outlook in China and robust non-OPEC supply growth remain headwinds.

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