DTN Oil Update
Oil Prices Fall Below $63 Amid OPEC+ Tension, US Crude Stock Build
HOUSTON (DTN) -- Oil futures dropped nearly 1% on Wednesday, driven by media reports signaling Kazakhstan's decision to increase production beyond the OPEC+ quota, which is expected to put downward pressure on global oil prices. The bearish sentiment was also supported by an unexpected build in U.S. crude oil commercial inventories last week.
According to Reuters, Kazakhstan, which produces nearly 2% of global crude output, "will prioritize its national interests over those of the OPEC+ group when deciding on oil production levels."
Separately, the Energy Information Administration reported Wednesday morning that commercial crude oil stocks rose by 200,000 bbl to 443.1 million bbl last week, 5% below the five-year average for this time of year. The figure was above the 4.57 million bbl draw reported by the American Petroleum Institute on Tuesday, April 22, for the same reference week.
Total motor gasoline inventories decreased by 4.5 million barrels in the week ending April 18, a 3% drop from the five-year average for this time of year. Meanwhile, distillate fuel inventories fell by 2.4 million bbl last week, 13% below the five-year average for this time of year.
Also last week, gasoline output averaged 10.1 million bpd while distillate fuel production decreased to an average of 4.6 million bpd, the EIA data showed.
The front-month NYMEX WTI for May delivery fell by $1.46 to $62.21 bbl, while ICE Brent for June delivery dropped by $1.38 to $66.06.
May RBOB gasoline futures were down $0.0230 to $2.0766 gallon, while the front-month ULSD futures contract slid by $0.0276 to $2.1210 gallon.
The U.S. Dollar Index gained 0.920 points to 99.610.