Oil prices fell the most in about a month as government data showed US crude inventories swelled to the highest levels since June 2021.
The Energy Information Administration’s report on Wednesday also showed increased inventories of products such as distillate — a precursor for diesel — despite relatively low refinery-utilisation rates. The data provides a glum picture of current demand, said Bob Yawger, director of the futures division at Mizuho Securities USA.
“You can battle against positions all you want, but at the end of the day there were some very bearish developments there,” Yawger said in an interview.
In the afternoon, the Federal Reserve delivered a smaller rate hike than at its December meeting, and Chairman Jerome Powell said the central bank has made progress in the battle against inflation. While the comments helped equities erase their losses, they failed to revive crude.
Oil capped a third straight monthly loss in January, even amid optimism that China’s turn away from its strict Covid Zero policy will rekindle demand in the world’s largest crude importer. While growth is picking up, weakness among the country’s manufacturers and home sales suggest the recovery isn’t yet on a sure footing.
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- WTI for March delivery fell US$2.46 ($3.23) to settle at US$76.41 a barrel in New York.
- That’s the lowest close since Jan 10
- The commodity also slid below its 50-day moving average of US$77.60
- Brent for April delivery dropped US$2.62 to settle at US$82.84 a barrel.
- It dropped past its 50-day moving average of US$83