Oil Unmoved by Large Stockpile Build
by Bloomberg | Jordan Fitzgerald and Jack Wittels
click here to read this article at Rigzone.com
*this article was not written by Roseland Oil & Gas
Oil settled little changed after swinging between losses and gains as US petroleum stockpiles rose to the highest in more than three years, undercutting optimism about a summer demand surge.
West Texas Intermediate eked out a 7-cent gain to close just below $81 a barrel after the Energy Information Administration said crude stockpiles increased by 3.59 million barrels. The gain helped bring the combined inventories of oil and fuel products to the highest since February 2021. An industry group had estimated a much smaller increase in crude inventories last week, while a Bloomberg survey of analysts prior to the report had projected a decline.
The rising stockpiles are defying bulls’ expectations of stronger demand for crude and fuel products during the key US summer driving season. Broader financial markets also created a push-pull effect on crude. Volatility in equities contributed to crude’s fluctuations, while a strong dollar — which makes commodities based in the currency less appealing — added bearish pressure.
“The mixed signals the oil market is sending has made it difficult to break oil out of that trading range,” said Rob Thummel, a portfolio manager at Tortoise Capital Advisors. “We’ll find out in the coming months where oil is going as we see how summer demand is doing.”
Both futures and physical markets are also signaling some overhang in supplies. The prompt spread for WTI has weakened to about 72 cents in backwardation, down from as high as $1.15 last week. At the same time, physical prices of WTI Midland at the main hub of Houston slid to the lowest since October amid poor overseas demand.
Prices:
- WTI for August delivery settled little changed at $80.90 a barrel in New York.
- Brent for August settlement rose 0.3% to $85.25 a barrel.
Oil still is on track for a monthly gain after the Saudi energy minister underlined that OPEC+’s recent deal retains the option to pause or reverse production changes. Russian oil exports fell by the most in more than three months, and ongoing conflicts in the Middle East and Ukraine have also elevated prices. Later this week, traders will be watching US inflation data for clues on the path forward for interest rates.
by Bloomberg | Jordan Fitzgerald and Jack Wittels
click here to read this article at Rigzone.com
*this article was not written by Roseland Oil & Gas