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Oil Prices Drop amid Rising US Inventories


Thu 29 Feb 2024 | 04:52 AM
Oil and fuel storage tanks at Sinclair Casper Refining Co.'s oil refinery in Casper, Wyoming, United States Source: Bloomberg
Oil and fuel storage tanks at Sinclair Casper Refining Co.'s oil refinery in Casper, Wyoming, United States Source: Bloomberg
Taarek Refaat

Oil prices fell after moving in a narrow consolidation range, as traders evaluate the rise in US crude inventories, against expectations that the OPEC+ alliance will extend supply cuts.

The price of West Texas Intermediate (WTI) fell to settle near $78 per barrel under pressure from broader risk-off sentiment. The Energy Information Administration said that US crude inventories rose by 4.2 million barrels last week, less than the increase of 8.4 million barrels expected in the industry report.

Latest Oil Prices

WTI  $78.40  -0.18%

BRENT  $83.63  -0.06%

MURBAN CRUDE $82.21 -0.92%

NATURAL GAS $1.863  -1.17%

LOUISIANA LIGHT $80.93  +2.31%

BONNY LIGHT $85.03  +0.00%

OPEC BASKET $80.83  -1.70%

MARS US $78.07  -2.07%

GASOLINE $2.271  -3.13%

The increase in inventories somewhat dampens the belief that stronger physical markets drove the rise in the price of crude in recent sessions. The time intervals in a bullish backorder pattern have widened, as spot oil prices rise higher than futures ones. So-called physical market swaps and cash balance swaps for WTI crude oil also rose.

Oil prices are heading towards modest monthly gains, although prices are still within a relatively narrow range. This rise was supported by supply cuts by OPEC+, as the alliance is widely expected to agree to extend the cuts in the second quarter. Prices also received support from tensions in the Middle East.

However, concerns remain about demand prospects. China's crude consumption growth is expected to increase just 1% this year as the post-pandemic recovery fades and the adoption of new energy vehicles leads to a decline in demand, the China National Petroleum Corporation forecast in a report released on Wednesday.