Oil Edges Lower on Surprise Build in US Crude, Gasoline Stocks

The sun is seen behind a crude oil pump jack in the Permian Basin in Loving County, Texas, US, November 22, 2019. REUTERS/Angus Mordant
The sun is seen behind a crude oil pump jack in the Permian Basin in Loving County, Texas, US, November 22, 2019. REUTERS/Angus Mordant
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Oil Edges Lower on Surprise Build in US Crude, Gasoline Stocks

The sun is seen behind a crude oil pump jack in the Permian Basin in Loving County, Texas, US, November 22, 2019. REUTERS/Angus Mordant
The sun is seen behind a crude oil pump jack in the Permian Basin in Loving County, Texas, US, November 22, 2019. REUTERS/Angus Mordant

Oil prices slipped in early Asian trading on Wednesday following a brief rebound in the previous session after industry data showed an unexpected build in US crude oil and gasoline inventories, offsetting global oil supply concerns.

Brent crude futures fell 21 cents, or 0.27%, to $76.27 a barrel by 0020 GMT. US West Texas Intermediate crude slipped 25 cents, or 0.34%, to $72.95 per barrel.

US crude oil, gasoline and distillate inventories rose last week, according to market sources citing American Petroleum Institute figures on Tuesday, Reuters reported.

Benchmarks slipped accordingly. Both WTI and Brent had bounced off multi-month lows to settle higher in the previous session.

The API figures showed crude stocks were up by 176,000 barrels in the week ended Aug. 2, the sources said, speaking on condition of anonymity. Analysts polled by Reuters had expected crude stocks to fall by 700,000 barrels.

Gasoline inventories rose by 3.313 million barrels against analysts' expectations for a 1 million bbl draw, while distillate stocks rose by 1.217 million barrels, a bigger build than anticipated.

The US Energy Information Administration is due to release weekly inventory data at 10:30 a.m. (1430 GMT) on Wednesday.

On Monday, Brent futures slumped to their lowest since early January and WTI futures had touched their lowest since February, as a global stock market rout deepened on growing concerns of a potential recession in the US, the world's largest petroleum consumer.

However, both benchmarks broke a three-session declining streak on Tuesday as tensions in the Middle East stoked supply concerns, supporting prices.

Iran's vow of retaliation against Israel and the US following the killing of two militant leaders has raised concerns that a wider war is brewing in the Middle East.

"Any escalation of the conflict in the Middle East could see a greater risk of disruptions to supplies from the region," ANZ analyst Daniel Hynes said.

Lower production at Libya's 300,000 barrel-per-day (bpd) Sharara oilfield is also adding to concerns of supply shortages.

Global oil inventories decreased by around 400,000 bpd in the first half this year, according to US Energy Information Administration (EIA) estimates published on Tuesday. It expects stockpiles to decline by around 800,000 bpd in the second half of the year.



Maersk Sees Sustained Global Demand, but at Slower Pace

FILE PHOTO: A view of the sign for A.P. Moller-Maersk outside their offices in Copenhagen, Denmark, January 25, 2024. REUTERS/Tom Little/File Photo
FILE PHOTO: A view of the sign for A.P. Moller-Maersk outside their offices in Copenhagen, Denmark, January 25, 2024. REUTERS/Tom Little/File Photo
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Maersk Sees Sustained Global Demand, but at Slower Pace

FILE PHOTO: A view of the sign for A.P. Moller-Maersk outside their offices in Copenhagen, Denmark, January 25, 2024. REUTERS/Tom Little/File Photo
FILE PHOTO: A view of the sign for A.P. Moller-Maersk outside their offices in Copenhagen, Denmark, January 25, 2024. REUTERS/Tom Little/File Photo

Shipping company Maersk on Wednesday said the global demand for container transport was expected to continue to grow in the next few quarters albeit at a slower pace as substantial market risks persisted.

The Danish company also confirmed preliminary second-quarter earnings released last week when it raised its outlook for the third time since May, citing higher freight rates due to the Red Sea crisis and solid container shipping demand.

Maersk, viewed as a barometer of world trade, on Wednesday said global container demand was estimated to have grown 5%-7% in the second quarter, boosted by strong Chinese exports which grew 10% compared to a year ago, among other factors, Reuters reported.

"Global container demand growth is expected to remain positive in coming quarters, but likely at a slower pace," the company said in its earnings report.

Maersk last week also cautioned that prospects for the fourth quarter were uncertain.

"A healthy, albeit cooling labor market, and wage gains are expected to continue to support US consumers. Declining consumer confidence and savings, however, are clouds at the horizon," Maersk said on Wednesday.
For the full year, it expects global container market volumes to increase by 4-6%.

Shipping disruptions caused by Houthi militants' attacks on vessels in the Red Sea were expected to last at least until the end of the year, Maersk has said.

The attacks have drawn US and British retaliatory strikes and disrupted global trade but Maersk and rivals have benefited from longer sailing times and soaring freight rates as ships are rerouted around Africa.