DTN Oil Update
Oil Futures Bearish on Inventory Build, High Inflation
HOUSTON (DTN) -- â?¯Oil futures continued to face downward pressure Thursday morning due to a larger-than-expected build in oil stocks last week and concerns about high inflation levels driven by trade tariffs imposed by the Trump administration on China, Canada and Mexico.
The front-month NYMEX WTI futures fell by $0.83 to $70.54 barrel (bbl) while the April ICE Brent futures contract dropped by $0.92 to $74.26 bbl. March RBOB futures contract edged down by $0.0206 to $2.0690 gallon while ULSD futures contract for March delivery fell by $0.0491 to $2.4029 gallon.
The U.S. Dollar Index dropped by 0.11% to 107.71 against a basket of foreign currencies.
Wednesday, Feb. 12, the EIA reported commercial crude oil inventories in the U.S. rose by 4.3 million bbl to 427.9 million bbl in the week ended Feb. 7. The figure was lower than the 9.043 million bbl draw for the same reference week reported by API on Tuesday.
Gasoline stocks dropped by 3 million bbl week-over-week to reach 248.1 million bbl, above the 2.507 million bbl reported by API, while distillate fuel stocks rose by 100,000 bbl to 118.6 million bbl last week.
Separately, the EIA expects growth of global petroleum and other liquids output will be driven by non-OPEC+ countries this year and in 2026, according to its most recent Short-Term Energy Outlook.
"We estimate that total world petroleum and other liquids supply increased by about 0.6 million barrels per day (bpd) in 2024 and will increase by 1.9 million bpd in 2025 and 1.6 million bpd in 2026. Increasing crude oil production from four countries in the Americas -- the United States, Guyana, Canada, and Brazil -- drives this growth," the EIA-STEO report said.
This morning, the U.S. Bureau of Labor Statistics reported the Producer Price Index for final demand advanced 0.4% in January after seasonal adjustment. The figure was lower than in December when the index advanced 0.5% and above November's 0.2% gain. However, January's PPI was higher than the consensus estimates for a 0.1% increase.
The Bureau of Labor Statistics on Wednesday reported the CPI rose 0.5% in January, bringing the annualized rate of inflation for the all-items index to 3.0%. January inflation was above the market expectation of 0.4%.
Higher than expected inflation in January has been attributed to the uncertainty generated by 10% trade tariffs the United States has imposed on imported goods from China and 25% on aluminum and steel imports from Canada and Mexico.
Separately, the Department of Labor reported the advance figure for seasonally adjusted initial claims was 213,000 for the week ended Feb. 8, a decrease of 7,000 from the 220,000 revised level from the previous week. The figure was below the market expectation of 220,000.
Maria Eugenia Garcia can be reached at Maria.Garcia@dtn.com
