Aker rig

Build in US crude stockpiles and weak fuel demand

LONDON, March 24, 2021 – Oil was mixed Wednesday morning in Asia, as investors continue to digest an increase in US crude oil stockpiles.

Brent oil futures were up 0.76% to $60.84 by 9:46 PM ET (1:46 AM GMT). WTI futures inched down 0.02% to $57.75, slipping below the $60 mark. The prompt timespread for Brent futures is now at a bearish 7 cents in contango, compared with the bullish backwardation of 67 cents at the beginning of March.

US crude oil supply data from the American Petroleum Institute showed a build of 2.927 million barrels for the week ending Mar. 19. Forecasts prepared by Investing.com predicted a 900,000-barrel build, while a 1-million-barrel draw was recorded during the previous week.

 

Further data from the US Energy Information Administration is due later in the day.

The outlook is also clouded by a third wave of Covid-19 cases in Europe, which has triggered renewed restrictive measures in several countries. The number of cases is also rising in India, the third-largest oil importer globally.

Oil has dropped more than 12% in less than two weeks due to weak fuel demand, a strengthening dollar, and investors unwinding their long positions. The drop could prompt more action from the Organization of the Petroleum Exporting Countries and allies (OPEC+) when it convenes on Apr. 1 to determine production policy for May 2021.

Despite the recent drop, however, the black liquid is up almost 20% in 2021. The rollout of Covid-19 vaccines globally has increased hopes of more mobility and fuel demand recovery in the long run.

First published in Investing.com

Read our latest insights on:

Stay Informed