Oil falls on rising US stockpiles

FE Team | Published: May 09, 2024 00:32:04

LONDON, May 8 (Reuters): Oil prices fell on Wednesday as industry data showed a rise in crude and fuel inventories in the United States and as the US dollar strengthened, signalling that demand for oil is coming under pressure.
Brent crude oil futures fell 52 cents, or 0.6 per cent, to $82.64 a barrel by 1400 GMT. US West Texas Intermediate crude futures fell 67 cents, or 0.9 per cent, to $77.71 a barrel.
Both benchmarks fell marginally in the previous session on signs of easing supply tightness and weaker global oil demand from an EIA forecast report on Tuesday.
US crude stocks rose by 509,000 barrels in the week ended May 3, market sources said, citing American Petroleum Institute figures. Gasoline and distillate fuel inventories also rose, they said.
"API numbers released overnight were moderately bearish due to stock builds in both crude and products... Concern over weaker-than-usual US gasoline demand and this stock build have weighed on the prompt RBOB gasoline crack," ING analysts said in a client note.
Official US government data on stockpiles is due at 1430 GMT. Analysts polled by Reuters expect US crude oil inventories to have fallen by about 1.1 million barrels last week.
A stronger US dollar , which makes it more expensive for holders of other currencies to buy oil, also weighed.
"Taking away the current geopolitical trigger leaves the market staring into a world of sticky inflation in the US that is countered by interest rates that not only keep the US dollar elevated but make any sort of commodity trading more expensive," PVM Oil analyst John Evans said.
Hopes of a ceasefire in Gaza have also put pressure on oil prices in recent sessions, with some analysts saying the risk premium on oil had declined in tandem.
The US believes negotiations on a Gaza ceasefire should be able to close the gaps between Israel and Hamas. US Central Intelligence Agency Director Bill Burns will travel to Israel on Wednesday for talks with the Israeli Prime Minister Benjamin Netanyahu and other top officials, a source familiar with the matter told Reuters.