DTN Oil
Oil Futures Drop After API Reports Outsized Crude Build
VIENNA (DTN) -- Oil futures closest to expiration on the New York Mercantile Exchange and Brent crude on the Intercontinental Exchange continued to slide Wednesday morning, after the American Petroleum Institute late Tuesday reported yet another sizable build to U.S. crude oil stockpiles.
API data showed commercial crude oil inventories increased 4.09 million barrels (bbl) in the week ended April 12, outpacing average expectations by a factor of six. The larger-than-expected draw to gasoline inventories -- 2.51 million bbl versus an expected 1.0 million bbl -- seemed to do little to alleviate the bearish effect of rapidly expanding crude oil inventories. All eyes will be on the Energy Information Administration's weekly inventory report, scheduled for 10:30 a.m. EDT release Wednesday.
At the same time, the geopolitical risk premium associated with an increasingly bellicose Iran and Israel is melting away, and oil futures' time structure indicates worries over near-term threats to supply have somewhat receded. Brent's forward curve has flattened since early April, with the prompt spread falling back below $0.80 bbl after having peaked at $1.07 bbl on April 5.
Near 7:15 a.m. EDT, WTI futures for May delivery were down $0.47 bbl to trade near $84.89 bbl, and Brent for June delivery fell $0.51 bbl to $89.51 bbl. RBOB for May delivery dropped $0.0182 gal to $2.8041 gal, while ULSD for May delivery traded near $2.6355 gal, down $0.0158 gal.
Karim Bastati can be reached at karim.bastati@dtn.com