Oil drops as investors scoop up profits after U.S. inventory build

Author of the article: TOKYO — Oil prices fell on Friday, after rising to seven-year highs this week, as investors took profits after a build in U.S. crude and fuel inventories, though overall sentiment remained solid due to concerns over tight supply and geopolitical risks. Brent crude futures dropped $1.52, or 1.7%, to $86.86 a…
Oil drops as investors scoop up profits after U.S. inventory build

Author of the article:

TOKYO — Oil prices fell on Friday, after rising to seven-year highs this week, as investors took profits after a build in U.S. crude and fuel inventories, though overall sentiment remained solid due to concerns over tight supply and geopolitical risks.

Brent crude futures dropped $1.52, or 1.7%, to $86.86 a barrel by 0606 GMT. The contract earlier fell by as much as 3%, the most since Dec. 20. The global benchmark touched $89.50 a barrel on Thursday, its highest since October 2014.

U.S. West Texas Intermediate (WTI) crude futures slid $1.66, or 1.9%, to $83.89 a barrel. The contract earlier fell as much as 3.2%, also the most since Dec. 20, after rising to its highest since October 2014 on Wednesday.

The recent rally in crude prices appeared to run out of steam on Thursday when Brent and WTI ended the trading session with slim losses, but both benchmarks have gained more than 10% so far this year.

“An unexpected increase in U.S. crude stockpiles prompted investors to take profits,” said Tatsufumi Okoshi, senior economist at Nomura Securities, adding the recent rally has been overdone.

“Still, losses were limited as expectations that supply tightness would continue amid recovering demand and geopolitical tensions between Russia and Ukraine and in the Middle East kept investors cautious about selling,” he said.

Gasoline inventories in the United States, the world’s biggest oil consumer, rose by 5.9 million barrels to their highest since February 2021, according to the U.S. Energy Information Administration (EIA). Crude stockpiles rose by 515,000 barrels last week, against industry expectations.

The EIA also reported a slight decline in refinery runs, indicating lower demand for crude.

“Slumping stock markets amid concerns that the Federal Reserve may aggressively move to raise rates this year also weighed on sentiment,” said Chiyoki Chen, chief analyst at Sunward Trading.

Oil supply concerns mounted this week after Yemen’s Houthi group attacked the United Arab Emirates, OPEC’s third-largest producer, while Russia, the world’s second-largest oil producer, has built up a large troop presence near Ukraine’s border, stoking fears of invasion.

However, the International Energy Agency (IEA) said on Wednesday that oil supply will soon overtake demand as some producers are set to pump at or above all-time highs, while demand holds up despite the spread of the Omicron coronavirus variant. (Reporting by Yuka Obayashi; Editing by Christian Schmollinger and Kim Coghill)

Financial Post Top Stories

Sign up to receive the daily top stories from the Financial Post, a division of Postmedia Network Inc.

By clicking on the sign up button you consent to receive the above newsletter from Postmedia Network Inc. You may unsubscribe any time by clicking on the unsubscribe link at the bottom of our emails. Postmedia Network Inc. | 365 Bloor Street East, Toronto, Ontario, M4W 3L4 | 416-383-2300

Read More

Total
0
Shares
Leave a Reply

Your email address will not be published.

Related Posts
Akanda to Acquire Portugal-based Holigen, Securing a Cannabis Sector Leadership Position in Europe, the Middle East and Africa (EMEA) with EU GMP Market Access
Read More

Akanda to Acquire Portugal-based Holigen, Securing a Cannabis Sector Leadership Position in Europe, the Middle East and Africa (EMEA) with EU GMP Market Access

Author of the article: Sorry, your browser doesn't support embedded videos. Transformational deal will add prized cultivation, manufacturing and distribution assets to accelerate Akanda’s seed-to-patient model and satisfy demand in fast-growing European cannabis markets Akanda will have immediate EU GMP certification, a significantly expanded product portfolio, and an award-winning genetics library Advertisement 2 This advertisement…
Oil dips on U.S. crude stock build, supply worries limit losses
Read More

Oil dips on U.S. crude stock build, supply worries limit losses

Author of the article: Reuters Sonali Paul and Jeslyn Lerh SINGAPORE, Oct 26 (Reuters) – Oil prices eased on Wednesday after industry data showed U.S. crude stockpiles rose more than expected, but losses were capped by supply worries. Financial Post Top Stories Sign up to receive the daily top stories from the Financial Post, a…
Fed’s Kashkari cautions against all-clear on banking woes
Read More

Fed’s Kashkari cautions against all-clear on banking woes

Author of the article: Published May 22, 2023  •  3 minute read NEW YORK — Federal Reserve Bank of Minneapolis President Neel Kashkari cautioned that while it may appear like the worst of the banking sector’s stresses are over, history showed more trouble can’t be ruled out. “It’s far too soon to declare all-clear” and…
Teachers’ expands push into Asia with plan to double Singapore staff
Read More

Teachers’ expands push into Asia with plan to double Singapore staff

Joins other Canadian pension funds deploying more capital to region Author of the article: Bloomberg News David Scanlan The Singapore skyline. “Singapore gives us another dimension in terms of dealing with Southeast Asia and Australia,” said Teachers' CEO Jo Taylor. Photo by KEVIN LAM /Reuters The Ontario Teachers’ Pension Plan is looking to potentially double…