Oil falls by more than $1/bbl on US crude build, security threat worries
By Laila Kearney
NEW YORK (Reuters) — Oil futures sank by $1 a barrel on Wednesday as surging U.S. crude inventories pushed down prices and a possible security threat to the U.S. that might dampen oil demand in the world's largest economy.
Brent crude futures settled at $81.60 a barrel, shedding, $1.17, or 1.4%. U.S. West Texas Intermediate (WTI) crude futures settled at $76.64 a barrel, losing $1.23, or a 1.6%.
U.S. crude inventories jumped by 12 million barrels to 439.5 million barrels last week, the Energy Information Administration said, far exceeding analysts' expectations in a Reuters poll for a 2.6 million-barrel rise as refining dropped to its lowest levels since December 2022.
«The refinery utilization rate is a pseudo disaster, down four to five weeks in a row at the end of winter» said Bob Yawger, director of energy futures at Mizuho, adding that refiners have kept activity slow even after emerging from a deep freeze that hampered operations last month.
Refinery crude runs last week fell by 298,000 barrels per day to 14.5 million bpd and refinery utilization rates decreased by 1.8 percentage points to 80.6% of total capacity, both the lowest levels since Winter Storm Elliott similarly knocked scores of refineries offline in December 2022.
Meanwhile, the U.S. Congress intelligence chair warned of a 'serious national security threat', without providing further details, scaring some oil investors.
«At the risk of sounding flip, war and/or terror events outside the oil producing regions are bearish for oil prices due to the expected hit to demand,» John Kilduff, partner at New York-based Again Capital.
Prices drew some support from a monthly report on Tuesday from the Organization of the Petroleum Exporting
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