​Oil prices sag as US crude stock build continues

2024-02-29
Summary:

Thursday saw oil prices dip due to a significant rise in US crude stockpiles, sparking concerns over sluggish demand and prolonged high interest rates.

Oil prices eased early on Thursday after a larger-than-expected build in US crude stockpiles stoked worries about slow demand and signs of an extended period of higher interest rates.

Crude inventories rose for the fifth consecutive week, increasing by 4.2 million barrels in the week ended 23 Feb, the EIA said, compared with analysts' expectations for a 2.7 million-barrel rise.


Unplanned refinery outages following a winter storm in January, along with planned plant turnarounds, has kept refining near its lowest levels since late 2022.


Hamas urged Palestinians to march to Jerusalem's Al-Aqsa Mosque at the start of Ramadan next month, raising the stakes in negotiations for a truce in Gaza. Biden said a deal could be reached as soon as next week.


The Houthis said earlier this week they could only reconsider their missile and drone attacks on international shipping in the Red Sea once Israel ends its "aggression" in the Gaza Strip.


The discount on Russian crude oil has narrowed close to zero relative to Brent, mostly due to countries outside of the G7 coalition buying up more of the country's oil, according to Goldman Sachs.

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Brent crude has been fluctuating around its 200 SMA since early February. The US PCE release due later in the day could be the catalyst for a price breakout but the path of least resistance is still flat.


Disclaimer: This material is for general information purposes only and is not intended as (and should not be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by EBC or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.

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