Oil settles down 1%, then drops more on hint of big U.S. crude build
BENGALURU -Oil prices settled 1 percent lower on Tuesday as traders worried about mounting supplies, and prices extended losses in post-settlement trading after sources said data from the American Petroleum Institute showed a large build in U.S. crude oil and distillate inventories.
Sources said the industry group reported a crude oil build of 10.5 million barrels in the week ended Feb. 10.
The U.S. Department of Energy (DOE) said on Monday that it would sell 26 million barrels of oil from the SPR, which is already at its lowest level since 1983.
Brent futures for April delivery fell $1.03, or 1.2 percent, to $85.58 a barrel by 1:05 p.m. EST (1805 GMT). U.S. West Texas Intermediate crude futures for March fell by $1.08, or 1.4 percent, to $79.06 a barrel.
WTI futures slid by another 22 cents to $78.84 a barrel in post-settlement trading. Brent futures fell by 32 cents to $85.26 a barrel.
Official inventory figures from the Energy Information Administration are due on Wednesday. If the data shows a build in crude oil inventories, it will be the eighth straight week of rising U.S. stocks.
Article continues after this advertisementBoth benchmarks had sunk more than $2 during the session, but pared losses after data showed the slowest pace of acceleration in the U.S consumer price index since late 2021. Analysts said the data would likely keep the Federal Reserve on a moderate interest rate hiking path.
Article continues after this advertisement“Interest rates are now at a point where every 25 basis points matter and could be the difference between a soft landing and a recession,” OANDA analyst Craig Erlam said in a note.
Oil prices also pared losses after the Organization of the Petroleum Exporting Countries raised its 2023 oil demand forecast by 100,000 barrels per day in a monthly report, citing the reopening of the Chinese economy after COVID restrictions.
“OPEC’s monthly oil market report yielded some cautious optimism,” said Kpler analyst Matt Smith. He added that oil prices remained lower as the markets entered a risk-off sentiment
