Oil fell on concern US stockpiles expanded again. Futures lost as much as 1.5 percent in New York. Inventories probably rose 2.9 million barrels last week, according to a Bloomberg survey before a government report later Thursday. Global equities and industrial metals also dropped after an upbeat US growth outlook fueled the possibility of interest-rate hikes.
Oil has gained almost 30 percent in the past six months on expectations for robust demand and continued supply curbs by the Organization of Petroleum Exporting Countries (Opec). Yet, price growth has slowed this year as US drillers put more rigs to work, pushing the country’s output to a record. A strengthening dollar this week has also dragged down commodities priced in the currency.
The dollar’s gain “has started to weigh on oil prices,” said Jens Naervig Pedersen, an analyst at Danske Bank A/S in Copenhagen.
“Sentiment in the oil market has been slightly bearish following the past weeks’ surge in the US rig count.”
West Texas Intermediate (WTI) for April delivery fell 34 cents to $61.34 a barrel on the New York Mercantile Exchange at 10:25 a.m. London time, after losing 11 cents on Wednesday. Total volume traded was about 26 percent below the 100-day average.
Brent for April settlement was down 24 cents at $65.18 a barrel on the London-based ICE Futures Europe exchange, after gaining 17 cents on Wednesday. The global benchmark crude traded at a $3.83 premium to WTI.
US crude inventories rose by 1.84 million barrels in the week through February 9, data from the Energy Information Administration show. While analysts surveyed by Bloomberg expect a further increase in this week’s numbers, the American Petroleum Institute was said to report a decline of 907,000 barrels.
The Bloomberg Dollar Spot Index, a gauge of the currency against 10 major peers, rose for a fifth consecutive day on Thursday before dropping back to trade little changed.
Last year’s shrinkage in global oil inventories was “fairly unprecedented,” Chris Bake, a senior executive at Vitol Group, said in London. About 500 million barrels were drawn from storage in a “fairly short time,” with most major hubs affected, he said. Gasoline futures slipped 0.6 percent to $1.7469 a gallon, after adding 0.4 percent on Wednesday.
Image credits: Bloomberg