Brent crude futures settled at $81.60 a barrel, dropping, $1.17, or 1.4 per cent and U.S. West Texas Intermediate crude futures settled at $76.64 a barrel, declining $1.23, or a 1.6 per cent
Oil futures plunged by $1 a barrel on Wednesday as surging U.S. crude inventories pushed down prices and a possible security threat to the U.S. that might dampen oil demand in the world’s biggest economy.
Brent crude futures settled at $81.60 a barrel, dropping, $1.17, or 1.4 per cent. U.S. West Texas Intermediate crude futures settled at $76.64 a barrel, declining $1.23, or a 1.6 per cent.
U.S. crude inventories soared by 12 million barrels to 439.5 million barrels last week, the Energy Information Administration (EIA) said, far exceeding analysts’ expectations in a Reuters poll for a 2.6 million-barrel rise as refining declined to its lowest levels since December 2022.
The refinery utilization rate is a pseudo disaster, down four to five weeks in a row at the end of winter, said Bob Yawger, director of energy futures at Mizuho, adding that refiners have kept activity slow even after emerging from a deep freeze that hindered operations last month.
Refinery crude runs last week dropped by 298,000 bpd to 14.5 million bpd and refinery utilization rates dropped by 1.8 percentage points to 80.6 per cent of total capacity, both the lowest levels since December 2022.
At the risk of sounding flip, war and/or terror events outside the oil producing regions are bearish for oil prices because of the expected hit to demand, commented John Kilduff, partner at New York-based Again Capital.
Prices drew some support from a monthly report on Tuesday from the OPEC that said global oil demand will increase by 2.25 million bpd in 2024 and by 1.85 million bpd in 2025. Both forecasts were unchanged from last month.
