UPDATE: US crude oil inventories have surged by 6.5 million barrels over the past week, according to a bearish report released by the American Petroleum Institute (API). This alarming increase is triggering immediate reactions across the oil market, which is already grappling with a broader sell-off in risk assets.
In early trading today, oil prices felt the downward pressure, with ICE Brent settling 0.69% lower, reflecting a market under strain. Analysts Ewa Manthey and Warren Patterson from ING pointed out that while oil is holding relatively well compared to other commodities, the latest inventory data is a significant concern for traders.
The API report highlights a notable rise in crude stocks at Cushing, Oklahoma, which increased by 400,000 barrels. However, there was some positive news for refined products: gasoline and distillate inventories fell by 5.7 million barrels and 2.5 million barrels, respectively. Despite the bearish outlook for crude, these declines in refined product stocks could support market dynamics moving forward.
Adding to the market volatility, reports have emerged that Ukraine has struck the Norsi refinery in Russia, which has a capacity of around 340,000 barrels per day. This attack, combined with ongoing sanctions and drone activity targeting Russian infrastructure, is providing unexpected support to the middle distillate market. The ICE gasoil crack is currently trading at approximately $30 per barrel, reflecting the tightening supply conditions in the wake of geopolitical tensions.
As the oil market digests this data, traders and investors are closely monitoring these developments. The impact of rising inventories coupled with geopolitical incidents could significantly influence prices in the coming days.
Stay tuned for further updates as the situation evolves. The oil market is in a critical state, and developments are unfolding rapidly. Share this urgent news with others who need to be informed about the latest in the oil sector.
