Oil slips 1% on large build in US crude stocks; market watches Middle East
Shafaq News/ Oil prices fell onWednesday after data showed US crude inventories rose by more than expectedeven as refining activity rebounded, though futures remained up about 2% thisweek as traders factored in continuing conflict in the Middle East.
Brent crude futures dropped$1.26, or 1.7%, to $74.78 a barrel by 11:08 a.m. (15:08 GMT) US West TexasIntermediate crude futures shed $1.2, or 1.7%, to $70.54.
Oil had settled higher in theprevious two sessions, paring last week's losses of more than 7%. Thosedeclines stemmed from worries about Chinese demand and some easing concernsaround Middle East oil supply being disrupted, but investor sentiment appearedto reverse at the start of this week.
In the US, crude inventories roseby 5.5 million barrels to 426 million barrels in the week ended October 18, theEnergy Information Administration said, exceeding analysts' expectations in aReuters poll for a 270,000-barrel rise. Gasoline inventories also rose lastweek while distillate stockpiles fell.
"As we continue to gradually exit from peak refinerymaintenance at the start of the month, refinery runs have climbed back above 16million bpd after bottoming out two weeks ago," said Matt Smith, lead oilanalyst at Kpler.
The impact of the crude stocks build on prices was counteredsomewhat by persistent concerns over potential oil supply risk from conflict inthe Middle East.
"The market continues to wait for Israel's response toIran's missile attack," ING analysts said on Wednesday, adding thatTuesday's price strength was possibly because of the lack of any outcome fromUS Secretary of State Antony Blinken's latest visit to Israel.
Blinken pushed onWednesday for a halt to fighting between Israel and militant groups Hamas andHezbollah, but heavy Israeli air strikes on a Lebanese port city Tyredemonstrated that there was no respite.
"Market participants pricedfor the Middle East conflict to drag for longer, with a ceasefire dealpotentially seeing some gridlock," said IG market strategist Yeap JunRong.
(Reuters)
