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Oil prices settle up 4% despite big U.S. crude inventory build

Published Apr 12, 2022 09:42PM ET Updated Apr 13, 2022 03:13PM ET
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© Reuters. Active pumpjacks from oil wells are pictured at the Inglewood Oil Field, the largest urban oil field in the United States, from the Baldwin Hills Scenic Overlook in Culver City, California, U.S., March 10, 2022. Picture taken March 10, 2022. REUTERS/Bing
 
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By David Gaffen

NEW YORK (Reuters) -Oil prices jumped on Wednesday, as a large increase in U.S. crude inventories failed to soothe worries about tight global supply, with major oil traders expected to shun Russian barrels.

Brent crude settled up $4.14, or 4%, to $108.78. U.S. West Texas Intermediate (WTI) crude futures ended up $3.65, or 3.7%, to $104.25.

The gains came a day after both benchmarks climbed more than 6%. The oil market has swung wildly as end-users and traders have tried to quantify the disruption in Russia's daily exports following its invasion of Ukraine. Most estimates range from 1 million to 3 million barrels per day.

"At the end of the day the market is running on some of these headlines out of Russia, which is becoming more threatening, and that continues to be more of a risk," said Phil Flynn, analyst at Price Futures Group. "There's still a debate of what impact this is going to have."

On Tuesday, U.S. President Joe Biden accused Russia of genocide, and the United States, France and Germany all pledged to send more weapons. Biden listed artillery systems, armoured personnel carriers and helicopters.

Major global trading houses plan to reduce crude and fuel purchases from Russia's state-controlled oil companies as early as May 15, sources said, to avoid falling foul of European Union sanctions on Russia, the world's second largest crude exporter.

Russian President Vladimir Putin said Moscow can easily redirect exports of its vast energy resources away from the West. Some countries, including India, have kept buying Russian oil at steep discounts. [nL2N2WB10P]

On Tuesday, the International Energy Agency (IEA) lowered expectations for worldwide demand and said rising global production could offset Russian oil output losses. The IEA said it expects Russian output to drop 1.5 million bpd in April, growing to close to 3 million bpd from May.

The White House is releasing 180 million barrels from U.S. reserves over six months, part of a release of 240 million barrels from members of the International Energy Agency.

U.S. production is expected to keep rising from 11.8 million bpd now to about 12 million in 2022. Exports of refined products reached an all-time record, as heavy overseas demand caused U.S. stockpiles to fall.

The Organization of the Petroleum Exporting Countries (OPEC), has said it would be impossible to replace expected supply losses from Russia and it would not pump more crude.

Oil prices settle up 4% despite big U.S. crude inventory build
 

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Comments (5)
perplexed76 .
perplexed76 . Apr 13, 2022 1:44PM ET
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there will be no peace, stop being discouraged every week
Heine Pedersen
Heine Pedersen Apr 13, 2022 1:27PM ET
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Disgusting.. Fear over Facts
me ish
me ish Apr 13, 2022 9:45AM ET
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I find it utterly laughable that the stock market is at such high levels - not far off from the peaks in the third and fourth quarter of 21 - and yet the global economic and geopolitical situation is soooooo much worse and we've gone from FED transitory nothing to see here mentality, to serious Quant tightening to tame totally outa control inflation - but the markets are just ignoring it all pretty much - very soon I believe we're going to see a pretty big and sudden crash - there is no more QE propping up the markets. This is just now utter ignorance of crazy retail investors pouring the last of their stimmies into this insance market
Johan SurField
Johan SurField Apr 13, 2022 9:45AM ET
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There stimmies were spent long ago. Its not the retail investors propping up the market.
Shovan Ghosh
Shovan Ghosh Apr 13, 2022 9:12AM ET
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where s d update of gold???? oil update in every hour gold is more volatile than than currency right now useless app
gab nea
gab nea Apr 13, 2022 6:28AM ET
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am I naive for thinking the Saudis were our allies? what was Kushner doing there then, getting personally richer?
Apr 13, 2022 6:28AM ET
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Dont forget Hunter’s laptop and Biden Crime Syndicate!
trevor hron
trevor hron Apr 13, 2022 6:28AM ET
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They were supposed to be. Until Biden took office. Relationship has really fallen apart ever since.
Brent Oil
Brent Oil Apr 13, 2022 6:28AM ET
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ShHole countries can never be counted on
me ish
me ish Apr 13, 2022 6:28AM ET
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trevor hron  the Dems criticised MBS for dismembering the body of a US journalist that dared to criticise the Saudi regime - body chopped up into little bits in Turkey - Trump ignored that and wanted to be best buddies with MBS, Putin, and other crazy despots
 
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