DTN Oil Update
Oil Futures Tumble on US Stockpile Concerns
SECAUCUS, N.J. (DTN) -- The rally oil in snapped on Thursday, Jan. 22 morning, with crude futures tumbling more than 1%, as market participants warily watched U.S. inventory levels amid revived concerns about global oversupply.
U.S. President Donald Trump's walk back of threats to take Greenland by force also sparked an unwinding of geopolitical risks that had driven crude prices up almost 3% over three prior sessions. Trump's remarks at the World Economic Forum in Davos, Switzerland, put to rest fears of the U.S. resorting to military action over Greenland and risking decades of alliance with Europe and NATO.
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On Wednesday, the American Petroleum Institute (API) reported that U.S. crude stockpiles rose by 3 million bbl for the week ended Jan. 16, rising for a third straight week. Gasoline inventories climbed by 6.2 million bbl, up for a ninth consecutive week, while distillate balances dipped by 23,000 bbl, the API added.
The U.S. Energy Information Administration (EIA) will release at 12 p.m. EST inventory readings for crude, gasoline and middle distillates for last week, giving market participants an opportunity to verify the API numbers.
Concerns about oil oversupply have risen again with the Paris-based International Energy Agency maintaining this week a glut forecast of 3.7 million bpd for 2026 -- little changed from its prior expectation for a surplus of 3.8 million bpd.
A force majeure in crude deliveries out of Kazakhstan declared earlier in the week was, meanwhile, being solved with repairs carried out at the Black Sea oil-loading facility that was responsible for the outage, Bloomberg reported.
Elsewhere, the U.S. has begun marketing Venezuelan oil that had been suspended from the market since the capture of the country's president Nicolas Maduro by U.S. forces early this month.
NYMEX WTI crude for March delivery was down $0.87, or 1.5%, at $59.75 bbl. The ICE Brent crude contract for March retreated by $0.89, or 1.4%, to $64.35 bbl.
Downstream, NYMEX ULSD futures for February delivery fell by $0.0303 to $2.4002 gallon, while front-month RBOB moved down by $0.0281 to $1.8293 gallon.
The U.S. Dollar Index declined by 0.088 points to 98.48 against a basket of currencies.
