(adds analyst’s comments)
By Liz Moyer
Investing.com — U.S. oil stockpiles rose slightly less than expected in the latest week, the Energy Information Administration said on Wednesday.
Crude oil inventories rose 1.321 million barrels last week, compared with analysts’ expectations for a build of 1.623 million barrels.
Gasoline inventories fell 1.963 million barrels last week the EIA said, compared with expectations for a draw of 886,000 barrels.
“On the outset of it, this isn’t particularly a bad dataset,” said Investing.com analyst Barani Krishnan.
“Yet, oil is getting clobbered in the risk-off environment triggered by the China crypto crackdown that’s scalped most markets and commodities today, with the notable exception of gold.”
Krishnan said oil has been under pressure since the week began on speculation that U.S. sanctions on Iranian crude might be off soon if Tehran gets the nuclear deal it has been negotiating for with world powers over the past month.
“The surprisingly weak U.S. housing starts for April also indicates that at least some sectors of the economy are fighting back on ramping inflation and that others might follow suit,” Krishnan said. “Meanwhile, Asian case counts of Covid are exploding again. All this could cool the commodities rally as a whole.”
Drilling down to the specs in the latest EIA dataset, Krishnan said there was actually a shortfall of some 700,000 barrels on the expected build in crude despite a rise of about 900,000 barrels per day in imports last week.
“The gasoline drawdown was almost triple of what was forecast while the distillate consumption was about 50% above expectations. And exports virtually doubled from 1.8 million barrels per day in the previous week. And production has stayed at an even 11 million barrels daily.”
“All things being equal, we could see adjustment to the upside by tomorrow, if the undercurrents of this selloff start ebbing. Yet, with so many uncertainties still over the global economy and with Asia’s Covid flaring anew, it’s hard to say if we’ve seen the end of this.”
Oil Stockpile Rose 1.3 Million Barrels Last Week, Less Than Expected: EIA
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