Oil Edges Lower After Jumping on U.S. Crude Stockpiles Draw By Bloomberg


© Reuters. Oil Edges Lower After Jumping on U.S. Crude Stockpiles Draw

(Bloomberg) — Oil edged lower in Asia after jumping almost 5% on Wednesday as U.S. stockpiles data added to signs the demand outlook is improving.

Futures in New York traded near $63 a barrel after closing higher for a third day, the longest run of gains in more than a month. inventories dropped the most in almost two months last week, while a gauge of gasoline demand ticked higher for a seventh straight week. The bullish data followed upbeat assessments by OPEC and the International Energy Agency.

Oil had been stuck near $60 a barrel after a rally faltered in mid-March amid a resurgence in virus cases in some regions. While the IEA sees a temporary lull in the market due to the renewed outbreaks, it followed OPEC in boosting its demand estimates for this year as the economy rebounds from the pandemic.

The market will soon have to deal with more supply, however. OPEC+ and U.S. producers are set to start adding extra barrels from May. Another wildcard is Iran, which is seeking to revive a 2015 nuclear deal and have U.S. sanctions removed to lift crude exports, but progress on that remains uncertain.

“Consolidation is likely on the cards as crude may have overshot yesterday,” said Vandana Hari, founder of Vanda (NASDAQ:) Insights in Singapore. “The spike appears to reflect a selective view of a multi-speed world. Europe is still in the throes of Covid’s constraints and India is plunging into a deadlier second wave.”

The prompt timespread for was 43 cents a barrel in backwardation — where near-dated contracts are more expensive than later-dated ones. That compares with 49 cents a week earlier.

See also: Oil Agencies Bet on Vaccine Win for Second-Half Demand Optimism

U.S. crude stockpiles declined by 5.89 million barrels last week, according to Energy Information Administration data. Gasoline inventories increased for a second week, while distillate supplies — a category that includes diesel — dropped for the first time since early March.

The global recovery from the pandemic is looking uneven, however. The U.S. and China are seeing higher rates of fuel consumption, but India is renewing partial lockdowns amid record virus cases and a shortage of vaccines. South Korea and Japan are also seeing rising infections.

©2021 Bloomberg L.P.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





Source link

Leave a Reply

Your email address will not be published. Required fields are marked *