Oil Little Changed on Mixed Inventory Picture, Economic Woes

9 Oct 2019

Oil Little Changed on Mixed Inventory Picture, Economic Woes

. Crude prices settled little changed on Wednesday as renewed worries about the economy faced off with mixed data on U.S. oil supplies and news of more upheaval in the Middle East Wednesday.WTI futures settled down just 4 cents at $52.59 per barrel before returning to positive territory in after-hours trade.Global benchmark Brent settled up 8 cents at $58.32.Prices ran up early in the day after Turkey launched an invasion of northern Syria in pursuit of Kurdish militias that it suspects of helping separatists within Turkey. The operation began with massed air raids, including against civilian targets, according to a spokesman of the Kurdish-led Syrian Defense Force, quoted by MCNBC.But the latest weekly report from the Energy Information Administration on oil balances that showed a larger-than-expected crude stockpile build versus a bigger-than-anticipated slump in distillate and gasoline inventories. Adding flux to the data was the EIA’s measure of U.S. crude output, which the agency estimated had risen to a record high of 12.6 million barrels per day for the week ended Oct 4.Such a record high was "remarkable, considering the U.S. rig count is at a two-year low," analyst Barani Krishnan said.The EIA said crude inventories rose by about 2.9 million barrels for the week ended Oct. 4.Analysts were expecting a rise of 1.4 million, according to forecasts compiled by inventories sank by 1.2 million barrels, versus expectations for a drop of about 260,000. Distillate stockpiles dropped by about 3.9 million barrels, compared with forecasts for a decline of about 2.1 million."This is a pretty interesting dataset in the sense that it shows a fourth-straight week of crude builds, which are perfectly in line with post-driving season trends, while fuel inventories continue to collapse, surprising even bears in the market," Krishnan added."Refinery runs remain at least 10% below norm, which might explain the crude build," he said. "But imports were steadily under 7 million bpd and exports seem to be heading toward the 3.5 million bpd mark next."Toward the market’s settlement, however, both WTI and Brent gave up much of their early gains after minutes from the Federal Reserve’s September meeting, published on Wednesday, showed market participants may be anticipating more rate cuts than the central bank deemed necessary to stimulate the economy. So far this year, the Fed has conducted two quarter-point rate cuts back to back in July and September, to try and preserve the U.S. economy's record decade-long growth. Market participants expect the Fed to agree on another quarter point cut when it meets Oct 29-30.

Facebook Comments

You can comment on Oil Little Changed on Mixed Inventory Picture, Economic Woes using Facebook here

Disqus Comments

Join the discussion on Oil Little Changed on Mixed Inventory Picture, Economic Woes using Disqus