NEW YORK: Crude oil futures fell yesterday, as rising inventories in the United States pressured both Brent and US contracts and countered expectations for recovering demand.
Brent losses were tempered by those expectations for improving global demand and geopolitical concerns about energy supplies from Libya and Russia.
Brent April crude was down 65 cents at $60.98 at 12:19 EST (1719 GMT), off a $62.63 intraday peak. On Wednesday, Brent surged 5 percent. US April crude was down $1.64 at $49.35, following a gain of more than 3 percent the previous session. Brent’s premium to US crude increased to $12.06 yesterday, the widest since January 2014.
Helping limit Brent losses and boosting its premium to US crude was the growing number of Opec officials making cautiously hopeful comments on the outlook for demand for petroleum. Both crude contracts rallied on Wednesday, boosted by Saudi oil minister Ali bin Ibrahim Al Nuaimi saying demand was growing.
Adding to support for Brent this week was President Vladimir Putin’s warning on Wednesday that Russia would halt natural gas supplies to Ukraine if it did not receive advance payment.
Turmoil in Libya has kept production and exports from the nation uncertain, adding lift to Brent.
Meanwhile, US crude inventories continue to grow, adding another 8.4 million barrels to storage last week, according to government data. At the same time refinery capacity use fell as refiners do maintenance, helping the deficit of US April to May crude increase to more than $2 a barrel.
Reuters
