Oil Falls as Stockpiles Show Less Than Expected Growth
by Bloomberg | Julia Fanzeres and Jordan Fitzgerald
click here to read this article at Rigzone.com
*this article was not written by Roseland Oil & Gas
Oil fell, weighed down by declining equity markets and a government report that showed US crude stockpiles increasing less than projected.
West Texas Intermediate tumbled by 1.4% to settle below $78 after signs the Federal Reserve may hold interest rates higher for longer spurred a selloff in stocks. Oil had pared losses earlier in the session as data showed gasoline demand rising and a smaller gain in US crude inventories than estimated by an industry group. Still, oil remained within the nearly $5 range it has traded in this month.
While the inventory report helped crude recover from earlier losses, it’s likely not strong enough to change the broader trajectory of trading as “oil prices are stuck in a narrow range until the next catalyst,” said Rob Thummel, a portfolio manager at Tortoise Capital Advisors.
Traders also treated the overall inventory buildup with some skepticism as the report’s adjustment factor, essentially its margin of error, rose to the highest since November.
However, multiple gauges are signaling weakness in the physical market. Brent’s prompt spread remains close to flipping into a bearish contango structure for the first time since January — an indication of plentiful supply relative to demand. Meanwhile, the Brent DFL — a measure of Dated Brent relative to futures — also recently turned negative. Genscape data also showed expanded inventories in Europe’s oil trading hub.
Global benchmark Brent is around 6% higher this year, supported by factors including OPEC+ supply cuts. Geopolitical risks also linger, with recent drone strikes on Russian refineries and an oil tanker hit by a missile in the Red Sea area. Prices have cooled since mid-April, though.
Prices:
- WTI’s July contract fell 1.4% to settle at $77.57 in New York.
- Brent futures for July settlement declined 1.2% to $81.90 a barrel.
by Bloomberg | Julia Fanzeres and Jordan Fitzgerald
click here to read this article at Rigzone.com
*this article was not written by Roseland Oil & Gas