Oil Prices Settle Lower Amid Spike in US Crude Inventories
Oil prices settled lower Wednesday after giving up gains as a huge increase in U.S. weekly crude stockpiles and record high domestic production overshadowed a fresh escalation in Middle East tensions.
Oil prices settled 1.6% lower to $76.64 per barrel, while expiring in April fell 1.4% to $81.60 a barrel, after being up 1% earlier in the day.
US Weekly Crude Stockpiles Jump as Output Remains at Record Level
Inventories of U.S. crude rose by roughly 12 million barrels in the week ended Feb. 9, well above expectations of about only 3.3M barrels as U.S. production climbed to a record high of 13.31M barrels per day.
The larger than expected build in crude oil comes as U.S. refinery utilization dropped to 80.6% from 82.4% last week. Gasoline inventories rose by about 3.7M barrels against expectations of a draw of only 1.2 million barrels while distillate stockpiles increased by 1.9M barrels, compared to expectations for a fall of 1.6M barrels.
Middle East Tensions Rise Amid Israel Strikes in Lebanon
Middle East tensions, which have propped up oil prices amid fears of supply disruptions in the oil-rich region, were ratcheted up after Israel launched airstrikes in Lebanon in retaliation to rockets fired into Northern Israel.
Hopes of an Israel-Hamas ceasefire were dealt a blow after Israeli prime minister Benjamin Netanyahu called for a “powerful” operation in Rafa, defying calls from the international community to proceed carefully.
Oil prices settled lower Wednesday after giving up gains as a huge increase in U.S. weekly crude stockpiles and record high domestic production overshadowed a fresh escalation in Middle East tensions. Oil prices settled 1.6% lower to $76.64 per barrel, while expiring in April fell 1.4% to $81.60 a barrel, after being up 1% earlier in the day.
Inventories of U.S. crude rose by roughly 12 million barrels in the week ended Feb. 9, well above expectations of about only 3.3M barrels as U.S. production climbed to a record high of 13.31M barrels per day. The larger than expected build in crude oil comes as U.S. refinery utilization dropped to 80.6% from 82.4% last week. Gasoline inventories rose by about 3.7M barrels against expectations of a draw of only 1.2 million barrels while distillate stockpiles increased by 1.9M barrels, compared to expectations for a fall of 1.6M barrels.
Middle East tensions, which have propped up oil prices amid fears of supply disruptions in the oil-rich region, were ratcheted up after Israel launched airstrikes in Lebanon in retaliation to rockets fired into Northern Israel. Hopes of an Israel-Hamas ceasefire were dealt a blow after Israeli prime minister Benjamin Netanyahu called for a “powerful” operation in Rafa, defying calls from the international community to proceed carefully.
