Oil prices slide as US stockpiles rise
Investors had hoped to see US crude inventories shrink this week, but a recent report by American Petroleum Institute showed that they have increased, sending oil prices lower on Wednesday.
Oil prices fell on Wednesday, eroding earlier gains, as investors reacted to reports that US crude inventories rose last week.
Brent crude futures fell by 22 cents to $67.75 a barrel, representing a 0.32% decline, while US crude futures slipped 44 cents to $59.50 a barrel.
US crude inventories rise
The dip in oil prices was driven by a recent report by the American Petroleum Institute, which showed that US crude inventories had risen by 1.9 million barrels last week, exceeding analysts’ expectations who predicted a 1.2 million barrel drop.
The US Department of Energy will release its own set of weekly figures later on Wednesday.
Venezuela disruption fails to offset US stockpile data
Even major disruptions at Venezuela’s main oil export port of Jose could not offset the impact of rising US crude stockpiles, with the site’s four crude upgraders unable to resume operations after suffering a major power outage earlier this week.
To make matters worse, crude exports out of Venezuela fell significantly after US authorities opted to ban American refineries from purchasing the country’s oil.
US sanctions imposed on Venezuela and Iran, along with supply cuts agreed by the Organisation of the Petroleum Exporting Countries (OPEC) and other major producers in January have helped oil prices find their footing this year, rising more than 25% since the beginning of 2019.
‘Yo-yo price swings have become the norm in the oil market,’ PVM analyst Stephen Brennock said in a note. ‘Market focus switched back to supportive supply considerations. They include, most notably, Venezuela’s deepening oil woes.’
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