May 10, 2023
Oil slips as U.S. crude stock build offsets nascent demand uptick
Pull back in oil prices may be due to Russia cheating on OPEC+ quotas: Bison Interests' Josh Young
Oil fell for the first time this week after U.S. government data showed a build in crude inventories.
West Texas Intermediate settled under US$73 Wednesday, halting a rally that started late last week. Stockpiles at the U.S.’s main storage hub rose to the highest since March, while total inventories rose slightly. Traders were heartened by glimmers of fuel demand picking up, but not enough to extend the previous sessions’ rally.
“Crude prices remain heavy on rising inventories,” said Ed Moya, senior market analyst at Oanda. “The U.S. economy is still headed toward a recession and debt ceiling stress could keep oil heavy over the short-term.”
Crude has retreated this year as worries over Fed tightening and a potential U.S. recession outweigh a still solid physical market and supply cuts by the Organization of Petroleum Exporting Countries and its allies.
U.S. inflation moderated slightly in April, potentially giving the Federal Reserve room to pause interest-rate increases soon. But uncertainty over the timeline of any such moderation muted the data’s influence on oil prices.
- WTI for June delivery fell $1.15 to settle at $72.56 a barrel in New York.
- Brent for July settlement dropped $1.03 to settle at $76.41 a barrel.