Spark Global Limited Reports:
Singapore (Reuters) – Oil prices fell for a second straight session on Thursday as an unexpected rise in U.S. crude inventories raised concerns about demand after hitting multi-year highs.
U.S. crude was down 0.67 percent, or 52 cents, at $76.91 a barrel by 0649gmt. The market climbed to $79.78 on Wednesday, its highest level since November 2014. Brent crude fell 0.1%, or 8 cents, to $81 a barrel.
“Commercial crude oil inventories rose…” Anz said in a report. “Gasoline inventories also surged, raising concerns about weak demand.”
The U.S. Energy Information Administration said U.S. crude oil inventories rose 2.3 million barrels last week, below an estimate of 418,000 barrels. Gasoline stocks also rose, while distillate stocks fell slightly. (after)
Global oil prices have risen more than 50 percent this year, adding to inflationary pressures that could slow the recovery from the COVID-19 pandemic and hurt consumer demand. Gas and coal prices are also climbing.
The Organisation of the Petroleum Exporting Countries (OPEC+) said on Monday it would stick to its agreement to gradually increase oil production, sending crude prices to multi-year highs.
“Producer groups’ statements that their approach should reduce market volatility stand in stark contrast to the higher volatility associated with tighter markets, especially when inventories are at historically low levels,” Citi analysts said in a note.
“In the near term, oil prices appear to be skewed to the upside due to increased Chinese buying, coupled with tighter natural gas markets in the power sector, increasing oil demand and an increasingly tight market.”
Despite surging oil prices this year, Opec + decided to raise oil production modestly and incrementally, partly because of concerns that demand and prices could weaken, sources close to the cartel told Reuters.
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