Oil drops 2.5% on US inventory surge

Bigger-than-expected rise sparks concerns over demand


Reuters December 07, 2023
OGDCL’s crude oil output stood at 32,000 bpd at the end of last financial year, but it has now crossed 34,000 barrels through renewed efforts. photo: REUTERS

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HOUSTON:

Oil prices fell by 2.5% on Wednesday, as a bigger-than-expected rise in US gasoline inventories worried markets about demand and outweighed a draw in crude stocks.

Brent crude futures fell $1.96, or 2.53%, to $75.27 a barrel by 1558 GMT. US WTI crude futures fell by $2.19, or 3.03%, to $70.14 a barrel.

US gasoline stocks rose by 5.4 million barrels last week, the Energy Information Administration said, more than quintuple the 1 million-barrel rise that analysts had expected.

Read: Crude edges up ahead of OPEC+ meet

Crude inventories fell by 4.6 million barrels, far exceeding the 1.4 million-barrel drop analysts had expected.

"There is demand destruction coming in from the fuel side. The market is more demand focused than supply focused right now," Dennis Kissler, senior vice president of trading at BOK Financial. On Tuesday, both benchmarks settled at their lowest since July 6, a fourth straight session of losses.

Published in The Express Tribune, December 7th, 2023.

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