Oil fell as US stockpile data failed to assuage demand concerns while traders wait for economic data scheduled later today.
(Bloomberg) — Oil fell as US stockpile data failed to assuage demand concerns while traders wait for economic data scheduled later today.
West Texas Intermediate fell as much 3%, pressured by a rising dollar and dampened risk appetite, to slip below $80 a barrel. Uncertainty over demand is once again at the forefront of the market, blunting the impact of OPEC production cuts scheduled to begin in May.
“The market is laser-focused on product demand and this {EIA} report will not ease concerns that demand is fragile,” said Rebecca Babin, a senior energy trader at CIBC Private Wealth, referring to Wednesday’s release of Energy Information Administration data. “These numbers were not bad, but they were not good enough to keep traders sleeping well at night.”
Nationwide inventories declined 4.6 million barrels last week. Meanwhile, inventories at the nation’s largest storage hub at Cushing, Oklahoma, also fell, with stocks remaining at the lowest since January.
Despite the pullback, crude is still up from a 15-month low reached in mid-March following turmoil in the banking sector. A surprise announcement by OPEC+ on production cuts and curbed Iraqi flows pushed oil back into the $80-range. The producers’ group is looking to force consumers to take oil out of storage and shore up prices amid tentative demand growth.
Later today, an economic survey from the Federal Reserve will be closely watched for insight into the health of the US economy, along with the path of monetary policy.
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–With assistance from Natalia Kniazhevich.
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