Oil falls after an unexpected surge in US crude oil inventories

NEW YORK (Reuters) – Oil prices fell Thursday after industry data showed a surprise surge in U.S. crude oil inventories that revived fuel demand concerns related to the pandemic, as U.S. stimulus hopes that have supported the prices.

Brent crude futures fell 3 cents to $ 56.05 a barrel at 11:27 am EST (1627 GMT). US West Texas Intermediate (WTI) crude futures fell 14 cents to $ 53.17 a barrel.

Both benchmarks have risen in the past two days based on expectations of massive COVID-19 relief expenses under new US President Joe Biden.

On Wednesday, industry data showed U.S. crude oil inventories rose 2.6 million barrels last week, compared to analysts’ forecasts in a Reuters poll for a 1.2 million barrel draw. . [API/S]

Official inventory data was delayed for two days to Friday due to public holidays and the inauguration day of Martin Luther King Jr.

“We are on hiatus until we get the inventory report,” said Phil Flynn, senior analyst at Price Futures Group in Chicago. “The market is waiting to see what we will see tomorrow in stocks and stimuli along the way.”

Elsewhere, compliance with an agreement to reduce production from the Organization of Petroleum Exporting Countries and its allies fell in December from November. Compliance hit 99 percent last month, two sources told Reuters.

Meanwhile, the rise in coronavirus cases in China, the world’s largest crude oil importer, has weighed on prices.

Beijing plans to impose stringent requirements for virus testing during the Lunar New Year holiday season, when tens of millions of people are expected to travel, as it battles the worst wave of new infections since March 2020.

On Thursday, the Shanghai commercial hub reported its first locally transmitted cases in two months.

In the long run, the Biden administration may be bearish for oil.

Among his first actions as president, Joe Biden announced America’s return to the Paris climate agreement to combat climate change and revoked a permit for the Keystone XL pipeline project. from Canada.

The administration is also committed to ending the new oil and gas lease on federal lands.

Markets will also follow planned US efforts to strengthen nuclear constraints on oil producer Iran through diplomacy. It will raise the issue in early talks with foreign counterparts and allies, the White House said.

Stephanie Kelly’s reportage in New York; additional reports by Ahmad Ghaddar in London, Sonali Paul in Melbourne and Koustav Samanta in Singapore; Editing by Marguerita Choy and Barbara Lewis