Oil closes with fall due to the increase in US reserves

Oil prices fell slightly on Wednesday, with the market pricing in a large build in US crude stocks due to data adjustment, while forecasts of stronger global demand growth were supportive.

The futures of Brent fell 20 cents, or 0.23%, to $85.38 a barrel, while US West Texas Intermediate crude (WTI) was down 47 cents, or 0.59%, at $78.59.

US crude oil reserves increased by 16.3 million barrels per week passed to 471.4 million barrels, its highest level since June 2021, reported the United States Energy Information Administration (EIA).

The rise was much higher than the 1.2 million barrels analysts had forecast in a Reuters poll and compared with a rise of 10.5 million barrels shown in data from the American Petroleum Institute (API), a group industry trade.

But analysts said an unusually large crude supply adjustment of 2.0 million barrels per day (bpd) in the week ended February 10 from an adjustment of minus 700,000 bpd in the previous week ended February 3. contributed to excessive accumulation.

“Once everyone realized that the adjustment had skewed the EIA data, skepticism about the large buildup (of crude oil storage) crept into the market,” said John Kilduff, a partner at oil consultancy Investments Again Capital LLC in New York. “It’s something extraordinary.”

A report by the International Energy Agency (IEA), which raised its forecast for growth in oil demand for 2023 and noted that the containment of oil production OPEC+ could lead to a supply shortfall in the second half of the year, supported crude oil prices.

OPEC on Tuesday also raised its forecast for global oil demand growth to 2023 in its first upward revision in months.

US inflation data and statements by central bank policy makers, which have fueled investor fears of longer interest rate hikes, also weighed on the market.

On Tuesday, Federal Reserve officials said the US central bank will have to keep raising interest rates gradually to beat inflation and suggested that price pressures fueled by a hot labor market could drive up borrowing costs. more than what was thought.