Oil Declines as Industry Report Points to Swelling US Stockpiles

image is BloomburgMedia_SDTP6DDWRGG000_22-05-2024_06-00-09_638519328000000000.jpg

Crude oil storage tanks near Crane, Texas, U.S., on Sunday, Jan. 30, 2022. Temperatures are forecast to plummet across the oil and natural gas producing areas of Texas later this week, threatening to impact production and the power grid. Photographer: Matthew Busch/Bloomberg

Oil extended losses after an industry report pointed to rising US crude inventories, adding to bearish signs for the market.

Brent fell for a third session toward $82 a barrel and West Texas Intermediate eased near $78. The American Petroleum Institute reported crude stockpiles rose by 2.5 million barrels last week, according to people familiar. If confirmed by official data Wednesday, it would be the first gain this month.

Oil futures are still higher this year due to OPEC+ supply cuts, but some market measures are starting to point to weakness. The prompt spread for Brent is nearing a bearish contango structure, which would signal ample supply.


“Fundamentals are weak,” said Gao Jian, an analyst at Shandong-based Qisheng Futures Co., adding that traders will be focused on the upcoming OPEC+ meeting, which “will set the course” for the market in the second half. 

The producer group is scheduled to meet in early June and a rollover of existing supply curbs is expected by most market watchers surveyed by Bloomberg. The group has been keeping roughly 2 million barrels a day offline this year.

Other metrics that are showing weakness include the Brent DFL — a measure of Dated Brent relative to futures — and the Brent-Dubai EFS. Money managers have also trimmed their bets on rising prices.

©2024 Bloomberg L.P.

By Bloomberg News


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