February 29, 2024

Oil prices steadied after US inventories edged lower…

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By Shariq Khan

BENGALURU (Reuters) – Oil prices closed unchanged on Wednesday after government data showed a smaller-than-expected rise in U.S. crude inventories, fueling weaker economic data from Tuesday.

Brent crude was down 1 cent at $86.12 a barrel, while U.S. crude (WTI) futures were up 2 cents at $80.15 a barrel.

Benchmark Brent fell 2.3% and WTI futures fell 1.8% in Tuesday’s session after data showed US trade activity contracted for a seventh straight month in January, raising concerns about a slowdown.

“At the end of the day here, the market is starting to worry a little more about the economy and things like that,” Mizuho analyst Robert Yawker said. “The main concern at this point is the destruction of demand due to the economic slowdown.”

WTI prices rose more than $1 a barrel on Wednesday after the Energy Information Administration (IEA) said US crude inventories rose by 533,000 barrels to 448.5 million barrels last week. Analysts polled by Reuters had expected an increase of 1 million barrels. [EIA/S]

“The market sees the report as somewhat positive,” said Bill Flynn, analyst at Price Futures Group.

“If we look at oil, inventories are much lower than expected, and that raises concerns about supply tightness. Because strategic petroleum reserves have been largely depleted, we are not stockpiling as much as we normally do.”

(Reporting by Shariq Khan; Additional reporting by Alex Lawler, Yuka Obayashi and Muyu Xu)

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Reuters