Oil pared gains after an unexpected build in US crude inventories, managing to hold onto a three-day climb even as broader equity markets slipped.
(Bloomberg) — Oil pared gains after an unexpected build in US crude inventories, managing to hold onto a three-day climb even as broader equity markets slipped.
Total inventories rose 2.4 million barrels to the highest since June 2021, while inventories at America’s largest storage hub in Cushing also rose, according to data from the US Energy Information Administration.
“It’s kind of a head scratcher,” said Rob Thummel, a portfolio manager at Tortoise Capital Advisors. “Higher oil production, lower exports of crude oil, all of the numbers would indicate lower oil prices today.”
Oil has been trading in a narrow band this year as investors wait for sustained signs of a robust rebound from China following the end of the nation’s restrictive Covid Zero policy. Traders are also closely watching for the fallout from fresh sanctions on Russian refined products and its impact on trade flows.
Diesel futures fell more than 1.4% after the EIA report. Distillate stockpiles have replenished to their highest level in a year, led by a big build on the East Coast. An unusually warm winter has limited heating oil demand and fuel switching at power plants.
Elements, Bloomberg’s daily energy and commodities newsletter, is now available. Sign up here
–With assistance from Chunzi Xu.
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.