Brent gains as API reports drop in US crude stocks

The front-month ICE Brent contract has inched $0.08/bbl up on the day, to trade at $73.38/bbl at 09.00 GMT.

PHOTO: Oil barrels. Getty Images

Upward pressure:

Brent’s price inched up after the American Petroleum Institute (API) reported a draw in US crude stocks.

US crude oil inventories fell by 4.6 million bbls in the week ending 21 March, according to API estimates. The reported drop in US crude inventories exceeded market expectations of a 2.5 million-bbl decrease.

“Numbers overnight from the American Petroleum Institute were bullish,” two analysts from ING Bank noted.

A decline in crude oil stocks typically signals strong oil demand, which can put upward pressure on Brent’s price.

Downward pressure:

Brent’s price gains were capped as oil traders and market analysts assessed the latest efforts to broker a ceasefire in the Russia-Ukraine conflict.

According to a Bloomberg report, officials from the US confirmed that Moscow and Kyiv have agreed to a partial ceasefire deal in the Black Sea, as the truce talks continue in Saudi Arabia.

“Oil prices slid after Russia and Ukraine agreed to a maritime ceasefire,” ING Bank’s analysts said.

A ceasefire deal between Russia and Ukraine could see the US lifting its sanctions on Russian oil exports, which in turn could increase global oil supply, according to market analysts.

By Aparupa Mazumder

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