Crude oil came under further pressures on Wednesday after U.S. crude inventories rose the most in four weeks, suggesting that the world’s largest oil consumer still struggles to recover, while Pegasus pipeline remains shut.
Crude-oil inventories in the United States rose 4.7 million barrels last week according to the ADP report on Tuesday, much higher than the expected increase of 2.2 million, suggesting that demand on oil continues to be weak.
Later today the EIA report may show that U.S. crude stockpiles probably climbed to 388 million barrels last week, the highest level in more than 22 years, which may add to the downside pressures on oil prices amid demand worries.
Meanwhile, Exxon Mobile’s Pegasus pipeline, used to supply U.S. Gulf Coast refineries, continues to be closed until regulators are satisfied with repairs, which is leading to a buildup in stockpiles near the delivery point. A leak was discovered in Arkansas last week.
- Crude oil is trading around the $96.57 a barrel level compared with the opening at $96.89, while the highest is at $96.91 and the lowest is at $96.49
- Brent is trading around $110.25 a barrel after falling 0.10% or $0.44
A number of weak economic data shows that oil prices may face further headwinds this week although the Dow and S&P 500 both closed at record highs on Tuesday after the U.S. factory orders rose 3.0% in February.
After China’s downbeat PMI manufacturing and the disappointing U.S. ISM manufacturing, Britain`s manufacturing activity shrank for a second straight month. Meanwhile, eurozone’s unemployment hits a record 12%, while Italy`s political impasse continues.
Yet the international lenders gave Cyprus until 2018 to meet new budget targets providing some relief, however markets are now eyeing the U.S. APD employment change and Friday’s key jobs data from the U.S. and the central banks meeting in Japan, UK and the eurozone.
- Natural gas is trading at $3.981 per cubic feet after rising 0.30%
- Heating oil is trading at $3.0844 a gallon after falling 0.10%
- Gasoline is trading at $3.0448 a gallon after rising 0.13%