Oil Futures Fell Due to a Build in Crude, Gasoline Stocks
2/05 2:44 PM
Oil Futures Fell Due to a Build in Crude, Gasoline Stocks
Maria Eugenia Garcia
DTN Energy Editor
HOUSTON, TX (DTN) -- Oil futures fell Wednesday following data from the
American Petroleum Institute and Energy Information Administration, which
showed a build in crude and gasoline inventories and a draw in distillates
stocks.
The EIA reported today that commercial crude oil inventories in the U.S.
rose by 8.7 million bbl to 423.8 million bbl in the week ended Jan. 31.
This exceeded the 5.025 million bbl increase reported by API for commercial
crude oil inventory in the same reference week.
EIA also reported that gasoline stocks rose by 2.2 million bbl
week-over-week to reach 251.1 million bbl, while distillate fuel stocks fell by
5.5 million bbl to 118.5 million bbl last week.
Both figures were lower than the 5.426 million bbl increase in gasoline
inventory and a 6.98 million bbl drop in distillate fuel stocks reported by the
API during the previous week.
The oil futures markets reacted negatively to the EIA and API data, as the
front-month NYMEX WTI futures contract settled at $71.16 bbl, down by $1.54
while the April ICE Brent futures contract closed with a $1.49 loss to $74.71
bbl. Downstream, March RBOB futures contract fell by $0.0468 to $2.0522 gallon
while ULSD futures contract for March delivery dropped by $0.0441 to $2.3857
gallon.
The U.S. dollar index continued to weaken, falling by 0.44% to 107.39
against a basket of foreign currencies.
Separately, the U.S. Bureau of Economic Analysis and the U.S. Census Bureau
reported that the U.S. monthly international trade deficit increased to $98.4
billion in December, from the revised $78.9 billion in November. The December
figure was below the market expectation of $96.88 and was driven by an increase
in imports and a drop in exports.
One of the Trump administration's priorities is to reduce the U.S. trade
deficit by imposing retaliatory tariffs on China, Canada and Mexico, but
experts anticipate that this measure will have the opposite effect by adding
inflationary pressure on the economy.
On Feb. 1, the United States imposed a 25% additional tariff on imports from
Canada and Mexico and a 10% additional tariff on imports from China.
But the Trump administration announced a 30-day pause in the implementation
of such tariffs over Canada and Mexico, after negotiations with Canadian Prime
Minister Justin Trudeau and Mexico's President Claudia Sheinbaum. Meanwhile,
China has responded with an additional 15% tariff on U.S. coal and LNG, and a
10% additional tariff on crude oil imports.
The trade war with China, Mexico and Canada, led by Trump, and his plan to
put "maximum pressure" on Iranian crude trade put downward pressure on oil
futures prices and the U.S. dollar as well.
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