Oil falls below $83 after inventories jump
Friday, 23 April 2010
LONDON, Apr 22 (Reuters): Oil fell below $83 per barrel on Thursday after higher US inventories signaled demand in the world's top oil consumer was sluggish despite the global economic recovery.
Crude stocks in the United States rose unexpectedly last week, government statistics showed, and fuel supplies climbed more than forecast.
European oil industry data added to the bearish tone with figures from industry monitor Euroilstock showing oil refinery output in 16 European countries fell by 10.1 per cent in March from the same month last year.
US benchmark June light crude oil futures, also known as West Texas Intermediate, dropped more than $1 per barrel to a low of $82.30 before recovering slightly to trade around $82.50 by 1310 GMT. The front-month contract reached an 18-month high above $87 on April 6.
US prices came under pressure from figures on Wednesday showing a 1.8-million-barrel rise to over 34 million barrels last week in crude oil inventories at Cushing, Oklahoma, the landlocked pricing point for NYMEX crude futures.
The Energy Information Administration, said the increase at Cushing was responsible for most of a national US crude oil stocks rise of 1.9 million barrels.
But ICE Brent crude futures held up better than US futures and June Brent was trading around $2 higher than WTI on Thursday, down 87 cents at $84.83 a barrel.
North Sea crude supplies will tighten over the next month due to offshore maintenance work and Brent is also responding to evidence of more Chinese demand, analysts say.
Carsten Fritsch, energy analyst at Commerzbank, said the EIA report was still weighing heavily on the oil market.
Crude stocks in the United States rose unexpectedly last week, government statistics showed, and fuel supplies climbed more than forecast.
European oil industry data added to the bearish tone with figures from industry monitor Euroilstock showing oil refinery output in 16 European countries fell by 10.1 per cent in March from the same month last year.
US benchmark June light crude oil futures, also known as West Texas Intermediate, dropped more than $1 per barrel to a low of $82.30 before recovering slightly to trade around $82.50 by 1310 GMT. The front-month contract reached an 18-month high above $87 on April 6.
US prices came under pressure from figures on Wednesday showing a 1.8-million-barrel rise to over 34 million barrels last week in crude oil inventories at Cushing, Oklahoma, the landlocked pricing point for NYMEX crude futures.
The Energy Information Administration, said the increase at Cushing was responsible for most of a national US crude oil stocks rise of 1.9 million barrels.
But ICE Brent crude futures held up better than US futures and June Brent was trading around $2 higher than WTI on Thursday, down 87 cents at $84.83 a barrel.
North Sea crude supplies will tighten over the next month due to offshore maintenance work and Brent is also responding to evidence of more Chinese demand, analysts say.
Carsten Fritsch, energy analyst at Commerzbank, said the EIA report was still weighing heavily on the oil market.