TOKYO: Oil prices fell for a fourth day on Wednesday, extending losses after a surge in U.S. inventories surprised investors, overshadowing an interest rate cut by the Federal Reserve.
Brent crude futures were down 6 cents at $60.55 a barrel by 0033 GMT, having fallen by 1.6% on Wednesday.
U.S. West Texas Intermediate (WTI) crude futures were down by 16 cents, 0.3%, at $54.90 a barrel, after declining 0.9%.
The Federal Reserve on Wednesday cut interest rates for a third time this year and signaled it plans no further cuts unless the economy takes a turn for the worse.
While a rate cut can often be bullish for oil prices because a stronger economy typically implies higher demand for crude, investors focused on soaring U.S. crude oil stockpiles amid higher imports and a release from national reserves.
"Oversupply concerns are dampening the optimistic outlook to the economy that the Fed painted," said Edward Moya, senior market analyst at OANDA.
Crude inventories rose 5.7 million barrels in the week to Oct. 25, the U.S. Energy Information Administration said on Wednesday, compared with analysts' expectations for a 494,000-barrel build.
On Tuesday, the American Petroleum Institute, an industry group, had reported a 708,000-barrel decline in inventories, raising hopes that official figures would also show a drop.
Crude stocks at the Cushing, Oklahoma, delivery hub for U.S. crude futures rose for a fourth straight week, gaining 1.6 million barrels last week, the EIA said.
Still, gasoline and distillate inventories extended their declines even as refiners ramped up production, it said.
Gasoline stocks fell by 3 million barrels, compared with analysts' expectations in a Reuters poll for a 2.2 million-barrel drop. The fifth weekly drop brought stocks down to 220.1 million barrels, their lowest since Nov. 2017.
Distillate stockpiles, which include diesel and heating oil, declined for a sixth week in a row, falling 1 million barrels last week, versus expectations for a 2.4 million-barrel drop, the EIA data showed. - Reuters
Oil price falls on hike in US crude stockpiles, trade deal concerns
NEW YORK: Oil prices fell on Wednesday after a steep U.S. crude inventory build added to worries about a possible delay in resolving the U.S.-China trade war, which has hurt global oil demand.
Late in the session, U.S. crude futures found some support after TC Energy Corp said it was shutting its Keystone crude pipeline due to a spill in North Dakota. The company did not say how long the major conduit, which carries 590,000 barrels per day (bpd) of crude from Canada to refineries in the U.S. Midwest, would be out of service.
U.S. West Texas Intermediate (WTI) crude futures settled at $55.06 a barrel, down 48 cents, or 0.9%. Brent crude futures fell 98 cents, or 1.6% to end at $60.61.
U.S. crude oil stockpiles soared last week amid higher imports and a release from national reserves, while gasoline and distillate inventories extended their declines even as refiners ramped up production, the Energy Information Administration said. [EIA/S]
Crude inventories, excluding the Strategic Petroleum Reserve (SPR), rose 5.7 million barrels, the EIA said, compared with analysts' expectations for a 494,000-barrel build and a 708,000-barrel decline reported by industry group the American Petroleum Institute late Tuesday.
"A strong rebound in Canadian imports and another SPR release has encouraged a build to crude inventories," said
Matt Smith, director of commodity research at Clipper Data. "Tempering the bearish influence of the solid crude build are draws to both distillates and gasoline amid a tick higher in implied demand."
Crude stocks at the Cushing, Oklahoma, delivery hub for U.S. crude futures rose for a fourth straight week, gaining 1.6 million barrels last week, EIA data showed, dragging on futures prices for the benchmark.
"Stocks at the WTI delivery hub have been trending higher since late September, which has put pressure on the prompt WTI time spreads, with the December/January spread this month having shifted from backwardation to contango," Dutch bank ING said in a note.
The United States and China were continuing to work on an interim trade agreement, but it may not be completed in time for U.S. and Chinese leaders to sign it next month, a U.S. administration official said.
"Selling came courtesy of the fading optimism over trade and a Fed rate cut. Risk assets were dealt a blow as market players worried that the U.S. and China would delay settling their trade differences," said PVM analyst Stephen Brennock.
The Federal Reserve on Wednesday cut interest rates for the third time this year to help sustain U.S. growth despite a slowdown in other parts of the world, but signaled no further reductions ahead unless the economy takes a turn for the worse.
A rate cut would help to support oil prices because a stronger economy typically implies higher demand for crude, while falling inventories suggest the market is coming into balance. - Reuters