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Oil Prices Retreat as US Crude Inventories Surge, EIA Data Spurs Concerns Over Demand

15 Feb 2024 , 10:19 AM

Brent crude futures declined by 0.4% to $81.26 a barrel, and U.S. West Texas Intermediate crude futures dropped by 0.5% to $76.28 a barrel in early trade on Thursday.

Both contracts faced a more than $1 per barrel loss on Wednesday, primarily driven by concerns over increased U.S. crude inventories.

According to the Energy Information Administration (EIA), U.S. crude inventories experienced a substantial increase of 12 million barrels to reach 439.5 million barrels during the week ending on February 9. This surge surpassed analysts' predictions, as a Reuters poll had anticipated a rise of only 2.6 million barrels.

Nevertheless, the EIA report revealed contrasting trends for gasoline and distillate stocks. Gasoline inventories saw a notable decline of 3.7 million barrels, dropping to 247.3 million barrels, whereas analysts had expected a draw of 1.2 million barrels.

Refining levels reached their lowest since December 2022, contributing to the downward pressure on oil prices.

Despite the surge in crude inventories, EIA data indicated that gasoline and distillate stocks recorded larger-than-expected declines. Gasoline stocks fell by 3.7 million barrels to 247.3 million barrels, and distillate stockpiles decreased by 1.9 million barrels to 125.7 million barrels.

Kazakhstan announced its commitment to compensate for oil overproduction within the next four months in adherence to OPEC+ commitments.

Iraq stated its intention to review oil production and address any excess output above its OPEC+ voluntary cuts in the coming four months.

ANZ analysts stated in a recent note that this statement precedes the March meeting of OPEC, during which the group will deliberate on the potential extension of supply constraints into the second quarter. They emphasized that any indications suggesting a reluctance to extend these measures could have a negative impact on sentiment throughout the oil market.

For feedback and suggestions, write to us at editorial@iifl.com

 

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Related Tags

  • oil
  • Oil prices
  • US Crude
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