Oil dropped as a massive increase in US crude stockpiles signals that supplies remain ample, outweighing earlier risk-on sentiment.
(Bloomberg) — Oil dropped as a massive increase in US crude stockpiles signals that supplies remain ample, outweighing earlier risk-on sentiment.
West Texas Intermediate traded near $69 after US stockpiles rose 7.92 million barrels, and inventories at the key storage hub in Cushing, Oklahoma, swelled to the highest level since 2021. Many Wall Street banks have slashed their oil price estimates, largely because they see stockpiles rising and outweighing demand.
Earlier, prices rallied along with risk assets on expectations that the US Federal Reserve will announce a pause in its run of interest-rate hikes. A large batch of Chinese crude import quotas also added to an improved outlook for consumption in the world’s second-largest economy.
Crude has been largely range-bound since the start of May, as stubbornly high Russian supplies and concern about global demand counteract Saudi-led OPEC+ efforts to curb production. JPMorgan Chase & Co. became the latest oil bull to cut its forecast on Wednesday, with the bank saying OPEC+ action will no longer balance markets this year.
World oil markets may tighten “significantly” over the next few months as China’s fuel consumption rebounds from the pandemic amid OPEC+ curbs, the International Energy Agency said in a report Wednesday.
To get Bloomberg’s Energy Daily newsletter direct into your inbox, click here.
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.