Oil extended a run of lackluster trading as investors assessed mixed US inventory data and a persistent outlook for oversupply.
West Texas Intermediate fell 1.6% to settle below $60, a key level that can trigger accelerated buying when breached, with prices undulating in a band of about $2 since early last week.
The commodity was already under pressure when a US government report on Wednesday showed crude inventories rose 5.2 million barrels in the week ending Oct. 31. That’s the biggest increase since July, but lower than a mostly priced-in forecast by a closely followed industry group. Product inventories fell across the board, indicating resilient demand and limiting potential bearish momentum.
“A rebound in imports and subdued refining activity amid seasonal maintenance has encouraged a build to US crude inventories,” said Matt Smith, Americas lead oil analyst at market intelligence firm Kpler. “Observed crude export loadings were also materially lower than those reported by the EIA, contributing to the crude build.”
The US benchmark has fallen about 17% this year as increased production from OPEC+ and non-member nations amplified concerns that a global glut would form. The boss of commodities trader Mercuria said at the Adipec conference on Wednesday that an oversupply in the oil market is likely to be as much as 2 million barrels a day next year.
Meanwhile, India’s Reliance Industries, usually a major buyer of crude, sold a shipment of Iraqi oil to a refiner in Europe. The reasons for the move were unclear, but there’s heightened focus on the activity of Indian refiners after the US sanctioned Russia’s two largest oil producers, setting the stage for a possible slump in purchases from Moscow.
Oil Prices
WTI for December delivery declined 1.59% to settle at $59.60 a barrel in New York.
Brent for January fell 1.43% to settle at $63.52 a barrel.
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