Oil prices fell yesterday after a
surprise jump in U.S. crude stockpiles raised worries about demand in the
largest oil market.
Global benchmark Brent crude oil
futures fell 21 cents, or 0.3 per cent, to $77.38 a barrel. U.S. West Texas
Intermediate (WTI) crude futures fell 10 cents to $72.14 a barrel.
Early in the session, both
contracts had risen by more than a dollar before the U.S. Energy Information
Administration reported a surprise build in crude oil stockpiles and
larger-than-expected jumps in storage of gasoline and distillates.
"Today's EIA report
highlights investor concerns of slowing demand growth," said Rob Haworth,
senior investment strategist at U.S. Bank Asset Management.
U.S. crude inventories rose by
1.3 million barrels in the week ended Jan. 5 to 432.4 million barrels, compared
with analysts' expectations in a Reuters poll for a 700,000 barrel drop.
Gasoline stocks rose by 8 million barrels while distillate stocks jumped by 6.5
million barrels, the EIA reported.
"Investors appear caught
between ongoing conflicts, which are escalating oil transit costs in parts of
the world, soft global economic growth and potential Federal Reserve interest
rate cuts starting in March, which could spur economic activity," Haworth
said.
Europe's weak economic outlook
also added to oil demand concerns. The euro zone may have been in recession
last quarter and prospects remain weak, European Central Bank Vice President
Luis de Guindos said yesterday.
Limiting some losses, investors
continue worry about potential supply concerns in the Middle East arising from
the Israel-Hamas war.
On Sunday Libya's National Oil
Corporation (NOC) declared force majeure at its Sharara oilfield, which can
produce up to 300,000 barrels per day.
Leave Comments