Oil prices fall 2.5% on US inventory build

US oil production rises to 12.1 million bpd, Covid-19 cases in China hurt fuel demand

NEW YORK:

Oil prices sank by more than $2 a barrel on Wednesday after industry data showed that US crude stockpiles rose more than expected and on concerns that a rebound in Covid-19 cases in top importer China would hurt fuel demand.

Brent crude futures were down $2.16, or 2.3%, to $93.20 a barrel by 1732 GMT, while US West Texas Intermediate (WTI) crude futures had fallen $2.44, or 2.7%, to $88.47 a barrel. The benchmarks fell around 3% on Tuesday.

US crude inventories jumped by 3.9 million barrels in the last week to 440.8 million barrels as oil production increased to about 12.1 million barrels a day, US Energy Information Administration data showed.

US gasoline stocks shed 900,000 barrels in the week to 205.7 million barrels, the EIA said, compared with expectations in a Reuters poll for a drop of 1.1 million barrels. Distillate stockpiles, which include diesel and heating oil, fell by about 500,000 barrels, a smaller-than-expected decline.

Last week, the market had latched onto hopes that China might be moving toward relaxing Covid-19 restrictions, but over the weekend health officials said they would stick to their dynamic clearing approach to new infections.

Published in The Express Tribune, November 10^th, 2022.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.