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Oil futures turned lower Wednesday, pressured after official U.S. data revealed a 12 million-barrel weekly rise in commercial crude inventories and declines in gasoline and distillate stockpiles.
Price moves
-
West Texas Intermediate crude
CL00,
for March delivery
CL.1,
CLH24,
fell 45 cents, or 0.6%, to $77.42 a barrel on the New York Mercantile Exchange after posting gains in each of the last seven trading sessions. -
April Brent crude
BRN00,
+0.07% BRNJ24,
+0.07% ,
the global benchmark, was down 11 cents, or 0.1%, at $82.66 a barrel on ICE Futures Europe. -
March gasoline
RBH24,
-0.72%
declined by 1.6% to $2.356 a gallon, while March heating oil
HOH24,
-1.23%
lost 1.7% to $2.8455 a gallon. -
Natural gas for March delivery
NGH24,
-3.26%
traded at $1.621 per million British thermal units, down 4%.
Supply data
There’s “no doubt” that seasonal refinery maintenance and the fact that the refinery in Whiting, Ind., is down caused part of the “impressive increase in weekly crude supplies,” said Phil Flynn, senior market analyst at the Price Futures Group.
U.S. crude-oil refinery runs were down 297,000 barrels a day, week over week, and “that added up,” he said.
Still, the rise in crude supplies does not erase the fact that we saw big declines in gasoline and distillate inventories, Flynn said.
The Energy Information Administration on Wednesday reported that U.S. commercial crude inventories rose by 12 million barrels for the week that ended Feb. 9.
On average, analysts surveyed by S&P Global Commodity Insights forecast a weekly climb of 2.9 million barrels. Late Tuesday, the American Petroleum Institute reported a crude inventory gain of 8.5 million barrels, according to a source citing the data.
Analysts have attributed the buildup in crude supplies in part to a reported ongoing shutdown at BP’s
BP,
440,000-barrel-per-day Whiting oil refinery following a power outage earlier this month.
U.S. crude refinery inputs averaged 14.5 million barrels a day last week, 297,000 barrels per day less than the previous week’s average, the EIA reported.
The data also revealed weekly supply declines of 3.7 million barrels for gasoline and 1.9 million barrels for distillates. The S&P Global Commodity Insights analyst survey showed forecasts for inventory declines of 2 million barrels for gasoline and 1.6 million barrels for distillates.
The product side of the market is “getting squeezed and that should support oil,” Flynn said.
In the long run, the market has pulled back a bit partly because the buildup of crude supply was so “jaw-dropping,” but the data show that petroleum-product stocks are “tight” and refiners are going to have to do “some pretty impressive work to keep up with demand,” Flynn said.
U.S. oil production was unchanged in the latest week, holding at a record 13.3 million barrels a day, the EIA said, while crude stocks at the Cushing, Okla., Nymex delivery hub were up 700,000 barrels at 28.8 million barrels.
Read: Natural-gas prices at lowest since 2020 on mild weather, ample supply ‘double whammy’
Other market news
The IEA held a two-day ministerial meeting that ended Wednesday and emphasized the group’s commitment to safeguarding energy security and speeding up clean-energy transitions.
Comments out of the IEA this week were not market-moving. Rather, “they just affirm some of the key ongoing themes in the market for this year — that OPEC+ is continuing to be compliant in keeping barrels off the market, but only to make room for non-OPEC production growth,” said Matt Smith, lead oil analyst, Americas, at Kpler.
Meanwhile, he said, the growth in China’s energy demand is “nothing to get excited about.”
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