UPDATE: US crude oil inventories have surged by 6.5 million barrels over the last week, according to a bearish inventory report just released by the American Petroleum Institute (API). This significant increase comes amid a broader risk-off sentiment impacting markets, as highlighted by ING’s commodity experts, Ewa Manthey and Warren Patterson.
The oil market faced pressure throughout the day, with ICE Brent settling 0.69% lower. However, early trading today indicates continued downward pressure following the API’s inventory numbers. The crude stockpile in Cushing, Oklahoma, also rose by 400,000 barrels, signaling a concerning trend for oil prices.
In contrast, the news is somewhat supportive for refined products, as gasoline and distillate stocks fell by 5.7 million barrels and 2.5 million barrels respectively. This decline in refined product inventories could lead to increased prices for these commodities, providing a glimmer of hope amidst the bearish outlook for crude oil.
Reports emerging from Ukraine have added another layer of complexity, with claims of a strike on Lukoil’s Norsi refinery in Russia. This refinery, with a capacity of around 340,000 barrels per day, has been targeted amid ongoing tensions, further influencing the market for middle distillates. The ICE gasoil crack is currently trading around $30/bbl, indicating heightened demand for refined products.
As the market reacts to these developments, analysts are closely monitoring how the combination of increased US inventories and geopolitical tensions will shape oil prices moving forward.
The implications of these inventory changes are crucial for consumers and investors alike, as they may signal future price fluctuations in both crude oil and refined products. With markets already reacting, the next few days will be pivotal in determining whether this trend continues or stabilizes.
Stay tuned for further updates as this situation develops.
