Build in US crude stockpiles and weak fuel demand

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 (<a href=’https://theenergyyear.com/companies-institutions/opec/’>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