April 20, 2024
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OIL & GAS

Oil Prices Dip as U.S. Crude Stockpiles Surge

Oil prices fell for a second consecutive day on Wednesday following a report indicating a significant surge in crude stockpiles in the United States, coupled with indications that major oil producers, including OPEC+, are unlikely to alter their output policy at an upcoming technical meeting.

According to Reuters, Brent crude futures for May delivery slipped by 74 cents, or 0.9%, to $85.51 a barrel at 0420 GMT. The May contract is scheduled to expire on Thursday, with the more actively traded June contract also declining by 68 cents, or 0.8%, to $84.95.

Similarly, U.S. West Texas Intermediate (WTI) crude futures for May delivery dropped by 64 cents, or 0.8%, settling at $80.98.

Despite climbing to their highest levels since October last week, oil prices have retreated this week, remaining about 3% above the average closing price in the first week of March.

“A sharp rise in U.S. crude inventories and expectations for a potential inaction by OPEC+ in its output policy next week saw further unwinding in oil prices in today’s session, as profit-taking accelerates following a strong rally in mid-March,” said Jun Rong Yeap, a market strategist at IG in Singapore.

Market sources, citing American Petroleum Institute figures, reported a substantial increase of 9.3 million barrels in U.S. crude oil inventories for the week ended March 22.

Additionally, distillate inventories rose by 531,000 barrels, while gasoline stocks experienced a decline of 4.4 million barrels.

Ahead of an OPEC+ meeting next week, three OPEC+ sources informed Reuters that the group is unlikely to make any changes to its oil output policy until a full ministerial gathering in June.

The upcoming online meeting of the Joint Ministerial Monitoring Committee on April 3 will review market conditions and member compliance with output cuts.

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