Brent edges down following US crude stock build

The front-month ICE Brent contract has dipped $0.13/bbl on the day, to trade at $73.67/bbl at 09.00 GMT.

PHOTO: Getty Images

Upward pressure:

Brent's price has risen amid renewed supply concerns stemming from escalating tensions between Russia and Ukraine.

On Wednesday, Ukraine fired British cruise missiles into Russia, following the use of US missiles the previous day. Russia warned the use of Western weapons to strike targets deep within its territory would represent a significant escalation in the conflict, Reuters reported.

“An escalation in the conflict in Ukraine lifted Brent crude oil prices due to concern about disruptions to oil supply,” said Daniel Hynes, senior commodity strategist at ANZ Bank.

“For oil, the risk is if Ukraine targets Russian energy infrastructure, while the other risk is uncertainty over how Russia responds to these attacks,” analysts from ING Bank added.

Downward pressure:

Brent futures felt some downward pressure after the release of weekly oil data from the US Energy Information Administration (EIA), which showed an increase in US crude inventories.

According to the EIA, commercial crude oil inventories rose by 545,000 bbls, reaching 430 million bbls for the week ending 15 November.

Brent’s gains were “reversed after a bearish inventory report from the EIA,” Hynes noted.

Norway's Equinor announced on Wednesday that it fully restored output capacity at the Johan Sverdrup oilfield in the North Sea after a power outage earlier this week, Reuters reported. The news added more downward pressure on Brent futures.

By Tuhin Roy

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