London: Oil fell after an industry report showed a sharp jump in US inventories, adding to concern that supply keeps growing as demand ebbs.
Futures in New York dropped as much as 1.1 per cent after closing up 1 per cent on Wednesday. The American Petroleum Institute reported crude inventories rose by 10.5 million barrels last week, according to people familiar with the data. That would be the biggest increase since February 2017 if confirmed by the official Energy Information Administration figures due later on Thursday.
The Organisation of Petroleum Exporting Countries faces a “serious challenge” to defend oil prices next year as fuel-demand growth could slow further amid a wave of new supply from the US, Brazil and the North Sea, the International Energy Agency warned on Wednesday. Progress toward a limited US-China trade deal, while positive, isn’t expected to have a major impact on global economic growth unless existing tariffs are rolled back.
The best-case scenario on US-China trade would be a truce and no further tariff increases, Daniel Hynes and Soni Kumari, commodity strategists at ANZ Banking Group Ltd., said in a note. There’s also still a high chance of more supply disruptions in the Middle East, they said.
West Texas Intermediate for November delivery dropped 44 cents, or 0.8 per cent, to $52.92 a barrel on the New York Mercantile Exchange as of 10:43am. Singapore time. The contract added 55 cents on Wednesday, its first gain in three days.
Brent crude for December settlement fell 37 cents, or 0.6 per cent, to $59.05 on the London-based ICE Futures Europe Exchange. The global benchmark crude traded at a premium of $5.96 to WTI for the same month.