Oil Eases From 3-Month High on Report of Surprise Crude Build
The partial deal has relieved investors worried about further escalation and driven gains across the commodity complex.
(Bloomberg) -- Oil eased gains after an industry report showed surprise builds in U.S. crude and fuel supplies, stoking demand concerns.
Futures edged lower after touching $61 a barrel for the first time in three months. The American Petroleum Institute reported a 4.71 million-barrel rise in crude inventories last week, countering analysts expectations for a draw. U.S. gasoline supplies rose 5.6 million barrels, the industry group said -- more than double what analysts polled by Bloomberg were anticipating.
“That was ugly data -- big builds in crude and gasoline,” said Michael Loewen, director of commodity strategy at Scotiabank in Toronto.
Seasonally, gasoline stocks are already at multi-year highs. If the Energy Information Administration confirms the API data on Wednesday, the build gasoline would be the largest since January. The API also reported a nearly 4 million-barrel increase in distillate inventories.
Oil futures ended Tuesday’s session just 6 cents shy of the $61 mark, buoyed by rebounding U.S. factory production and progress between world’s two largest economies on trade. The factory data and imminent trade agreement followed deeper-than-expected output cuts agreed by OPEC+ earlier this month, which Citigroup Inc. said will help keep a floor under crude prices.
West Texas Intermediate for January delivery rose 33 cents to $60.54 a barrel on the New York Mercantile Exchange at 4:59 p.m. The futures have advanced 10% since the end of November and are on track for the biggest monthly gain since January.
Brent for February settlement climbed 50 cents to $65.84 a barrel on the London-based ICE Futures Europe Exchange. The global benchmark crude traded at a $5.36 premium to WTI for the same month.
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