Oil prices ease after surprise U.S. crude stock build confirmed

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NEW YORK – Oil prices eased on Thursday after U.S. data showed a surprise build in crude stockpiles last week, confirming an industry report.

Brent LCOc1 futures fell 28 cents, or 0.7%, to $40.51 a barrel by 1:20 p.m. EDT (1720 GMT), while U.S. West Texas Intermediate (WTI) crude CLc1 fell 23 cents, or 0.6%, to $37.82.

The U.S. Energy Information Administration (EIA) said crude inventories rose 2.0 million barrels last week.

Analysts in a Reuters poll had forecast a 1.3-million barrel draw, and the American Petroleum Institute on Wednesday reported a 3 million-barrel increase.

“Oil prices were unfazed after U.S. stockpiles unexpectedly rose … Crude production is starting to return following a couple of storms, but a weak demand outlook and the start of maintenance season will keep pressure (on) oil prices,” said Edward Moya, senior market analyst at OANDA in New York.

Brent and WTI futures dropped to their lowest since mid June earlier this week and have remained in oversold territory over the past several days. Brent’s Relative Strength Index (RSI) was under 30 for a fifth straight day for the first time since March.

In China, Bank ANZ said oil imports were likely to level off as independent refineries reach their maximum quotas.

In a further bearish sign, leading commodity traders were booking tankers to store crude oil and diesel.

The rising stockpiles come ahead of a meeting on Sept. 17 of the market monitoring panel of the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, a group known as OPEC+.

“Despite the recent slide in oil prices, we think that the OPEC+ leadership will continue to direct its efforts towards securing better compliance rather than pushing for deeper cuts at this stage,” RBC analysts said.

Reuters

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