News: Oil slips after U.S. crude stocks rise amid deep freeze hit to refiners.
MELBOURNE (Reuters) – Oil prices fell in early trading Wednesday after industry data showed US crude inventories rose unexpectedly last week as a freeze in the southern states slowed demand from refineries that had to close.
Crude oil inventories rose 1 million barrels in the week ending February 19, the American Petroleum Institute (API) reported Tuesday, while a Reuters poll estimated it drew 5.2 million barrels.
API data showed that the refinery’s crude oil volumes fell by 2.2 million bpd.
US West Texas Intermediate (WTI) crude oil futures fell 55 cents, or 0.9%, to $ 61.12 a barrel at 0136 GMT after falling 3 cents on Tuesday.
Brent crude oil futures fell 38 cents, or 0.6%, to $ 64.99 a barrel, undoing Tuesday’s 13 cents gain.
Investors will wait for confirmation from the US Energy Information Administration later Wednesday that crude oil inventories have risen for the past week, despite shale oil production being severely impacted amid the unprecedented glacial period in the southern US.
“The key question is how quickly the US oil supply will recover. It looks like supply is recovering faster than refineries, and supply will exceed demand over the next several weeks. This will add negative weight to the market, ”said Commonwealth Bank analyst Vivek Dhar.
The price decline is seen as a pause after rallying more than 26% to 13-month highs for Brent and WTI since the start of the year.
Prices have risen due to the disruption to U.S. supplies and supply discipline by the organization of petroleum exporting countries and allies, collectively known as OPEC +, led by an additional 1 million bpd cut by Saudi Arabia.
At the same time, stimulus spending to fuel growth, investors switching to commodities, and hopes that the introduction of vaccines could ease pandemic restrictions are fueling oil prices.
Reporting by Sonali Paul; Arrangement by Edwina Gibbs
Original Source © Reuters