Crude pulls back on rising US petrol and distillate stockpiles

New York — Crude futures reversed course, moving sharply lower on Thursday after US data showed petrol inventories rose unexpectedly last week, overshadowing a bullish drawdown in crude.

US crude inventories fell more than expected last week as refining runs increased, while petrol and distillate inventories rose, the Energy Information Administration (EIA) said on Thursday.

“The headline crude number has been offset by the products,” said Bill Baruch, president of Blue Line Futures in Chicago. “This is not a fundamentally bullish report.”

US crude traded down $1.00 at $67.72 a barrel by 3.29pm GMT. Global benchmark Brent traded 85c lower at $76.41 a barrel. Earlier in the session, both contracts had traded higher, encouraged by a weaker dollar and evidence of strong US fuel demand.

Emerging-market stocks, bonds and currencies have plunged in recent weeks in response to financial crises in the likes of Turkey, SA and Venezuela.

“In the last week we’ve seen the focus shift again from supply back to demand and the continued calamity in emerging market stocks, bonds and currencies is weighing on the medium and longer-term demand outlook,” said Saxo Bank senior manager Ole Hansen. “We did see quite a lot of momentum last week and then oil was shot down in flames after its failed attempt to break above $80 … now we have the extra dimension of a spike in oil prices that can only increase the pain [for consumers] and the risk of a slowdown in demand.”

Source: businesslive.co.za