Oil Slips Amid Rising U.S. Crude Supplies and Dollar Rally

Oil fell after a U.S. industry report pointed to a build in crude stockpiles.

30 Sep 2021, 05:26 AM IST

Oil Slips Amid Rising U.S. Crude Supplies and Dollar Rally

An employee displays a bottle of crude oil taken for testing. (Photographer: Heidi Wideroe/Bloomberg)

(Bloomberg) -- Oil slid as the dollar surged and after a U.S. government report showed crude stockpiles rose for the first time in eight weeks.

Futures in New York ended the session 0.6% lower after a choppy trading session on Wednesday. A more-than 4 million-barrel increase in U.S. crude stockpiles tugged futures lower, while a stronger dollar made exports of the commodity less attractive.

“This dollar strength has reached a level that can’t be ignored,” said John Kilduff, a partner at Again Capital LLC.

Oil’s advance earlier this week -- and Brent’s surge above $80 a barrel -- reflected signs of a tighter global market amid stronger demand and rising natural gas prices. Higher energy costs this month have stoked speculation that the Organization of Petroleum Exporting Countries and its allies may ease supply cuts more quickly. The White House said Tuesday it’s continuing to talk to OPEC and other international partners about the importance of competitive markets and doing more to support the recovery.

Meanwhile, world oil supply is expected to be 1.2 million barrels a day below demand in October, and 900,000 barrels a day in November, according to a OPEC secretariat document being reviewed by the group’s Joint Technical Committee.

Prices:
West Texas Intermediate crude futures for November delivery fell 46 cents to settle at $74.83 a barrel in New York Brent for November settlement dropped 45 cents to end the session at $78.64 a barrel

In addition to the crude stockpile rise in the U.S. last week, gasoline inventories rose for a second week and distillate inventories climbed for the first time since late August, Energy Information Administration data show. Yet, U.S. crude exports jumped above 3 million barrels a day, signaling stronger global demand.

Related coverage:
Saudi Arabia may cut the official selling price of its flagship Arab Light crude to Asia for November sales, according to a Bloomberg survey. Non-OPEC crude supply is expected to peak at 48 million barrels a day in 2025, before slipping to 39.3 million a day by 2045, according to the head of OPEC’s energy studies department. The crude-tanker market is likely to see an extended period of low earnings, with VLCCs expected to make less than $25,000 a day over the next year, said Peter Sand, chief shipping analyst at Bimco.

Related coverage:

Saudi Arabia may cut the official selling price of its flagship Arab Light crude to Asia for November sales, according to a Bloomberg survey.
Non-OPEC crude supply is expected to peak at 48 million barrels a day in 2025, before slipping to 39.3 million a day by 2045, according to the head of OPEC’s energy studies department.
The crude-tanker market is likely to see an extended period of low earnings, with VLCCs expected to make less than $25,000 a day over the next year, said Peter Sand, chief shipping analyst at Bimco.