UPDATE: US crude oil inventories have surged by 6.5 million barrels over the last week, according to the latest report from the American Petroleum Institute (API). This alarming increase is putting significant downward pressure on the oil market, prompting urgent reactions from traders and analysts alike.
The report, released earlier today, reveals that crude stocks in Cushing also grew by 400,000 barrels. Despite this bearish inventory news, refined product inventories showed more positive signs, with gasoline and distillate stocks falling by 5.7 million barrels and 2.5 million barrels, respectively. This has led some experts to suggest that while crude faces challenges, the refined products market may find support.
As noted by ING commodity experts Ewa Manthey and Warren Patterson, oil prices have struggled amid a broader risk-off sentiment in the markets. Although ICE Brent settled down 0.69% yesterday, it managed to perform relatively well compared to other assets. The downward pressure continued in early trading today, driven by investor concerns over oversupply.
Compounding these issues, reports have emerged that Ukraine has struck the Lukoil Norsi refinery in Russia, which has a capacity of around 340,000 barrels per day. This incident is expected to further support the refined products market, particularly middle distillates, as ongoing sanctions and military actions intensify pressures on Russian oil infrastructure.
The market is currently reacting to these developments, with the ICE gasoil crack trading around $30 per barrel, reflecting heightened demand for refined products amid the ongoing geopolitical tensions. As the situation evolves, analysts will be closely monitoring how these dynamics impact overall crude pricing.
What’s next? Traders are advised to keep an eye on upcoming data releases and geopolitical developments that could further influence market conditions. The urgency of the current inventory surge cannot be underestimated, as it has immediate implications on pricing and market stability.
Stay tuned for further updates as this situation develops, and be prepared for potential volatility in the oil markets.
