Crude oil fell for a third day after an unexpected jump in U.S. oil inventories while Bank of Japan`s latest monetary policy decision disappointed investors, darkening the outlook for oil demand; OPEC and the EIA trimming their global demand forecasts also weighs.
U.S. oil stockpiles rose 8.97 million barr,els last week, data from the American Petroleum Institute (API) showed on Tuesday, indicating that U.S. inventories are still relatively high as demand is soft although the summer driving season has started.
Sell-offs across the global equities markets were triggered by the disappointment at Bank of Japan`s (BoJ) inaction to calm the volatile government bond market. This revived fears that other central banks, including the U.S. Federal Reserve, could scale back stimulus efforts.
- Crude is trading as of this writing around $94.740 a barrel after falling $0.64
- Brent is trading around $102.40 a barrel after falling $0.56
Also weighing on sentiment was the cut in global oil demand forecasts by the Organization of the Petroleum Exporting Countries (OPEC) and the U.S. Energy Information Administration (EIA); yet OPEC expects demand to grow in the 2nd half of this year, boosted by economic recovery.
The EIA report may show later today that U.S. crude inventories probably dropped by 1.5 million barrels last week, after sliding 6.3 million barrels the week before. Gasoline inventories probably climbed 500,000 barrels while distillates probably gained 1.5 million.
Markets will also focus today on the latest developments between Sudan and South Sudan, the U.K.’s employment report and the meeting between Turkish Prime Minister Tayyip Erdogan, and the organizers of protests amid hopes the country’s crisis would end.
- Natural gas is trading at $3.724 per cubic feet, being almost unchanged
- Gasoline is trading at $2.8032 a gallon after falling 0.70%
- Heating oil is trading at $2.8532 a gallon after falling 0.15%