Oil slides after industry report shows big U.S. stockpile build
Futures fell from the settlement after the American Petroleum Institute was said to report that U.S. crude inventories rose by 7.29 million barrels last week. If confirmed by the Energy Information Administration on Wednesday, that would be the biggest weekly build since the middle of January. Analysts surveyed by Bloomberg are expecting a 1.45 million barrel increase.
The build was likely caused by both refinery maintenance as well as distortion after bad weather in the Gulf of Mexico, particularly in the Houston Ship Channel, affected last week’s report, according to John Kilduff, a partner at Again Capital LLC.
"It looks we’re playing a bit of catch up here and this is offsetting much of last week’s huge drop," he said.
Earlier in the session, oil switched between gains and losses in New York, settling less than 1 percent lower, as investors were waiting for the next catalyst from U.S.-China trade talks or shifts in the Venezuelan regime.
“There’s a lot of forces sort of canceling each other out here,” said Thomas Finlon, director of Energy Analytics Group Ltd in Wellington, Florida. “We’re just in a holding pattern.”
Crude in New York has risen for two straight months as OPEC and partners including Russia reduce output as part of their agreement to help balance global oil markets. The U.S.-China trade war and resulting threats over demand have limited gains, but the market would likely rise on news of a resolution.
West Texas Intermediate for April delivery slipped 3 cents to settle at $56.56 a barrel on the New York Mercantile Exchange. The contract was down 31 cents to $56.28 at 5 p.m. ET.
Brent for May settlement gained 19 cents to end the session at $65.86 a barrel on the London-based ICE Futures Europe exchange. The global benchmark crude’s premium over WTI for the same month traded at $8.92 a barrel.
China announced a major tax cut after an annual report by the country’s premier lowered targets for the expansion in gross domestic product to the slowest in almost three decades, informs Bloomberg.
“There’s every expectation that the fiscal stimulus that China’s been talking about, along with a probably much friendlier trade environment with the United States, might prevent a move toward less oil consumption in the country,” said Bart Melek, head of global commodity strategy at TD Securities in Toronto.