Brent loses momentum after US records a whopping build in crude stocks
The front-month ICE Brent contract moved $1.46/bbl lower on the day, to trade at $85.20/bbl at 09.00 GMT.
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Upward pressure:
Members of the Organization of the Petroleum Exporting Countries and its allies (OPEC+) are scheduled to meet on 3 April to discuss their output policies for the remainder of the year. Announcement of this meeting has contributed to Brent’s upward movement today.
Analysts anticipate members of the OPEC+ group to maintain their production levels at the upcoming meeting.
“Investors have purchased oil at the fastest rate for more than four years, amid optimism that Saudi Arabia and its OPEC+ allies will continue to restrict production while an improving economic outlook boosts consumption,” Reuters’ oil market analyst John Kemp commented.
Brent futures gained more support after Israel's Prime Minister Benjamin Netanyahu refused to participate in ceasefire talks with Hamas.
“Ceasefire talks between Israel and Hamas broke down again, with Israeli Prime Minister Benjamin Netanyahu accusing the group of extreme demands,” ANZ Bank’s senior commodity strategist Daniel Hynes noted.
Downward pressure:
Brent futures shed previous day's gains amid concerns over sluggish demand in the US.
US commercial crude inventories increased by 9.3 million bbls in the week ended 22 March, according to the American Petroleum Institute (API) data cited by Trading Economics. The surge in crude inventories suggests slow demand growth in the world’s largest oil-consuming nation, which could put downward pressure on Brent’s price.
“A sharp rise in U.S. crude inventories and expectations for a potential inaction by OPEC+ in its output policy next week saw further unwinding in oil [Brent] prices in today’s session, as profit-taking accelerates following a strong rally in mid-March,” IG Markets’ market strategist Jun Rong Yeap remarked.
By Tuhin Roy
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