Oil Drops to 3Wk Lows on Stock Build and Easing Tensions


   
    

   VIENNA (DTN) -- Oil futures closest to expiration on the New York Mercantile 
Exchange and Brent crude on the Intercontinental Exchange continued to slide 
Thursday morning, after the Energy Information Administration on Wednesday 
reported a larger-than-expected build to U.S. crude oil stockpiles.

   The EIA reported commercial crude oil inventories in the U.S. increased 2.7 
million barrels in the week ending April 12. Despite the combined 4.7 million 
bbl draw to gasoline and distillate inventories, total commercial petroleum 
stocks surged 10 million bbls last week, as builds to crude and a 1 million bbl 
build to jet fuel stocks came alongside a 7.5 million bbl surge in "other oils" 
stocks.

   Oil futures have now shed all gains since the Israeli attack on an Iranian 
consulate on April 1. Their time structure also indicates worries over 
near-term threats to supply have receded. Brent's forward curve has flattened 
since early April, with the prompt spread falling back below $0.60 bbl from 
$1.07 bbl on April 5.

   The U.S. Treasury Department on Wednesday announced it won't renew a license 
allowing for Venezuelan oil exports, de facto reinstating full sanctions. Over 
the past six months, this sanctions easement has allowed Venezuela to ramp up 
production and exports.

   Markets shrugged off this expected development. Near 7:30 AM ET, WTI futures 
for May delivery were down $0.46 bbl to trade near $82.23 bbl, and Brent for 
June delivery fell $0.51 bbl to $86.78 bbl. RBOB for May delivery dropped 
$0.0256 gal to $2.7031 gal, while ULSD for May delivery traded near $2.5440 
gal, down $0.0307 gal.

    

     

   Karim Bastati, karim.bastati@dtn.com, https://www.dtn.com




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