MELBOURNE: Crude oil prices fell on Thursday, heightening concerns about lower fuel demand after industry data showed an unexpectedly large rise in US oil inventories for a second straight week.
US West Texas Intermediate (WTI) crude futures fell 86 cents (1.1%) to $78.62 a barrel at 0109 GMT, while Brent crude futures fell 73 cents (0.9%) to $84.25 a barrel, about $1 loss increased. Percent from Wednesday.
Federal Reserve officials say interest rates need to rise by more than 5% to keep inflation in check, even though data showed retail sales fell more than expected in December. After that, the market weakened on fears of a looming US economic slowdown.
“This has heightened recession fears and consequently weakened risk appetite,” analysts at ANZ Research said in a note to clients.
Furthermore, US crude inventories increased by about 7.6 million barrels in the week ending Jan. 13, according to American Petroleum Institute data, market sources said.
Nine analysts surveyed by Reuters estimated that on average crude inventories had fallen by about 600,000 barrels.
This big build marks the second week in a row that inventory has increased significantly.
On the bullish side, however, distillate stockpiles, including diesel and kerosene, fell by about 1.8 million barrels, contrary to analyst expectations of an increase of 120,000 barrels.
The API report was delayed by a day due to the Martin Luther King Day holiday in the United States on Monday. The government’s Energy Information Administration will release its weekly inventory report on Thursday.
The U.S. dollar strengthened amid continued aggressive interest rate hikes, further weighing on oil demand. Because when the dollar rises, commodities become more expensive for people holding other currencies.
https://www.channelnewsasia.com/business/oil-down-1-another-surprise-build-us-crude-stocks-3216506 Oil falls 1% on another surprise build-up of US crude inventories