Oil futures: Brent slumps below $84/b on US stocks build, WTI sub-$80/b
Quantum Commodity Intelligence – Crude oil futures Wednesday were sharply lower, as benchmarks extended the broader downwards trend of the past week after data releases showed a steep build in US crude stocks.
Front-month Jul24 ICE Brent futures were trading at $83.51/b (1805 GMT), compared to Tuesday's settle of $86.33/b, as the contract tested six-week lows with a trough of $83.41/b.
At the same time Jun24 NYMEX WTI was trading at $78.98/b versus Tuesday's settle of $81.93/b, amid relatively light volumes with holidays in both Europe and Asia.
Markets retreated from the start of the session after data from the American Petroleum Institute revealed crude inventories increased almost 5 million barrels last week, coming in above expectations.
This included a near 1.5 million barrel draw at the key Cushing hub, the NYMEX delivery point.
However, the crude build was in part offset by a 1.5 million barrel draw in gasoline stocks, while distillates were down by more than 2 million barrels, according to the API industry body.
But the API data was followed up by weekly EIA figures released Wednesday which calculated US commercial crude oil inventories increased over 7 million barrels on the week, more than than offsetting the previous-week's 6 million barrel draw and triggering a relentless sell-off.
Prices also eased as negotiations for a ceasefire in Gaza continued, while US Secretary of State Antony Blinken called on Hamas to accept a truce and hostage deal.
However, Israel's Prime Minister Benjamin Netanyahu has reiterated plans to launch a ground offensive in Rafah regardless of the success of truce talks.
Meanwhile, a Reuters production survey found that OPEC cut output by 100,000 bpd in April to 26.49 million bpd, reflecting lower exports from Iran, Iraq and Nigeria.
A Reuters poll of economists and analysts surveyed in the second half of April forecasts Brent will average $84.62/b in 2024, compared to a $82.33/b average projection in the March survey.
