Brent declines following US crude stocks build
The front-month ICE Brent contract has dropped by $0.54/bbl on the day, to trade at $71.06/bbl at 09.00 GMT.
IMAGE: Oil storage tanks. Getty Images
Upward pressure:
Crude oil supply disruption concerns in the Middle East have provided some support to Brent’s price today.
Currently, the oil market's primary focus is on the upcoming third round of US-Iran nuclear talks – taking place in Geneva tomorrow.
“The rise in geopolitical tensions has taken focus away from the looming glut of oil that the market has been concerned about for several months,” ANZ Bank’s senior commodity strategist Daniel Hynes said.
Iran is the fourth-largest OPEC member, producing around 3.2 million b/d of crude oil.
Downward pressure:
Brent’s price has moved lower after the American Petroleum Institute (API) reported a huge rise in US crude stocks.
US crude oil inventories gained by a staggering 11.4 million bbls in the week ending 20 February, according to estimates from the API.
The API data was “well above” the 1.9 million-bbl rise that market analysts were expecting, according to two analysts from ING Bank.
A rise in US crude stocks can indicate lower demand for oil and put some downward pressure on Brent's price.
“The more widely followed Energy Information Administration (EIA) report will be released later today,” ING Bank’s analysts said. “A similar crude oil stock build to the API would be the largest build since February 2024,” they further added.
By Aparupa Mazumder
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