Crude oil prices dropped roughly 1% Wednesday following a surprise build in U.S. crude inventories, and as investors waited to see if a new round of tariffs by Washington on Chinese goods would come into force Sunday.
Brent futures fell 62 cents, or 1%, to settle at $63.72 a barrel. West Texas Intermediate crude dropped 48 cents, or 0.8%, to settle at $58.76/Bbl, Kallanish Energy reports.
U.S. crude stockpiles rose unexpectedly last week, while gasoline and distillate inventories jumped sharply higher, the Energy Information Administration said.
Crude inventories rose 822,000 barrels last week, compared with analysts’ expectations in a Reuters poll for a 2.8-million-barrel drop. (See story elsewhere in this issue.)
However, stocks at the Cushing, Oklahoma, delivery hub for WTI fell 3.4 million barrels (Mmbbl) last week, the biggest decline since February 2018, EIA said.
Opec issued a more bullish outlook for 2020, forecasting demand for its crude oil to average 29.58 million Bpd (Mmbpd) in 2020, fewer than the group’s November output.
OPEC’s expectation of a small deficit suggests a tighter market than previously thought. It had initially projected a 2020 supply glut, but U.S. shale output has slowed.
However, U.S.-China trade tensions continue to cloud the outlook for demand, with a Dec. 15 deadline for the next round of U.S. tariffs on Chinese imports approaching.
