Commodities News

Oil Down, with Tighter Market Weighed Against Large U.S. Crude Supplies Build

By Gina Lee – Oil was down on Thursday morning in Asia, giving up some of its sharp gains in the first half of the week. Investors are weighing a larger-than-expected build in U.S. crude supplies against a tightening market.

Brent oil futures edged down 0.20% to $108.56 by 12:32 AM ET (4:32 AM GMT) and WTI futures fell 0.54% to $103.69. Both Brent and WTI contracts on Wednesday ended the previous session roughly 4% higher, dismissing the large build in U.S. supplies.

Wednesday’s crude oil supply data from the U.S. Energy Information Administration showed a build of 9.382 million barrels for the week ended Apr. 8. Forecasts prepared by predicted a build of 863,000 barrels, while a build of 2.421 million barrels was reported during the previous week.

Crude oil supply from the American Petroleum Institute, released the day before, showed a build of 7.757 million barrels.

Worries of a tighter market, alongside rising prices, continue to impact investor sentiment. The International Energy Agency on Wednesday said that roughly 3 million barrels per day of Russian oil could be shut in from May 2022 thanks to sanctions and other restrictive measures. The measures are in response to the Russian invasion of Ukraine on Feb. 24.

Meanwhile, major global trading houses are also planning to curtail crude and fuel purchases from Russia’s state-controlled oil companies in May 2022, according to Reuters.

“Oil prices are looking very comfortable above the $100 level as U.S. and Chinese demand seems to be heading in the right direction,” OANDA senior analyst Edward Moya said in a note.

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