Oil Futures Down after API reports Surging US Crude Stocks
3/27 7:30 AM
Oil Futures Down after API reports Surging US Crude Stocks
VIENNA (DTN) -- Oil futures closest to expiration on the New York Mercantile
Exchange and Brent on the Intercontinental Exchange continued to slide
Wednesday morning, after settling lower Tuesday following a surprise inventory
report by the American Petroleum Institute showing U.S. crude oil stocks grew
by 9.337 million bbl last week. Inventories at the Cushing tank farm, the NYMEX
delivery point for West Texas Intermediate, rose 2.392 million bbl.
Yet another build in distillate fuel oil inventory reported by the API
Tuesday added to concerns over middle distillate demand amid the ongoing
manufacturing recession. According to the U.S. Energy Information
Administration, distillate fuel oil supplied, a proxy for fuel demand, over the
past four weeks trailed year-ago levels by close to 2%.
The Federal Reserve Bank of Richmond's manufacturing survey for March
released Tuesday showed the fifth negative reading in a row. This followed the
Dallas Federal Reserve Bank reporting another downturn in Texas business
activity in March.
Price support from Russia's recent announcement to order crude oil
production curtailments in line with the OPEC+ agreement was rather
short-lived, as was the case with so many seemingly bullish developments so far
this year. The growing divergence in gasoline versus middle distillate demand,
a global manufacturing rut and relatively hawkish monetary policies have been
clouding outlooks on fuel demand growth.
Near 8:00 AM ET, WTI futures for May delivery fell $0.37 to $81.22 bbl,
while Brent for May delivery was down $0.49 bbl to $85.76 bbl. RBOB for April
delivery were flat around $2.699 gallon, while ULSD for April delivery at
$2.6081 gallon shed $0.0137 gal.
Karim Bastati, karim.bastati@dtn.com, www.dtn.com
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