Oil Falls After Report Shows Surprise U.S. Crude Stockpile Gain
(Bloomberg) — Oil dropped after an industry report pointed to a surprise increase in American crude stockpiles, countering optimism over a potential U.S. stimulus agreement.The American Petroleum Institute reported crude inventories climbed by almost 600,000 barrels, according to people familiar with the data. That contrasts with a stockpile decline forecast in a Bloomberg survey, before official data later on Wednesday. Brent crude futures were 1.6% lower on Wednesday, reversing all of the previous session’s gains that were driven by hopes of the American economic stimulus.A resurgent coronavirus and expanding Libyan supply are pushing oil lower. While China is supporting demand, there are signs of weakening consumption in Western Europe. OPEC+ is also warning of a precarious market outlook. The coalition of producers will have to decide next month if it sticks with plans to raise production in January, or heeds industry warnings about an imminent glut if they do so.Brent “remains stuck in the low $40s with the weaker dollar and the potential for a stimulus having no positive impact,” said Ole Hansen, head of commodities strategy at Saxo Bank. The market is focusing on inventories, and “overall it makes sense that crude is struggling while the demand outlook remains murky.”Crude stockpiles at the American storage hub of Cushing increased by 1.17 million barrels last week, the API reported. That would be a fifth straight gain if confirmed by government data. Gasoline and distillate supplies declined, according to the API.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.