Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Oil Hit With Biggest One-Day Loss in Week After US Crude Build

CommoditiesJan 22, 2021 04:23PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters.

By Barani Krishnan

Investing.com - Oil prices fell their most in a week after the first U.S. crude build in six weeks reported by the government on Friday that corresponded with the lack of fuel demand amid the coronavirus pandemic.

New York-traded West Texas Intermediate, the key indicator for U.S. crude, settled down 86 cents, or 1.6%, at $52.27 per barrel. It was WTI’s sharpest one-day slide since last Friday when it fell 2.2%. But for the week itself, the U.S. crude contract lost about 0.2%.

London-traded Brent, the global benchmark for crude, settled down 78 cents, or 1.4%, at $56.10. 

The build in crude stockpiles coincided with President Joe Biden’s message on Thursday calling on Americans to brace for “dark days” ahead from the Covid-19, which could kill up to 500,000 people in the country by the week ended Feb. 13, raising the current death toll of 412,000.

“President’s words matter,” Phil Flynn, energy analyst at the Price Futures Group brokerage in Chicago, wrote in his Friday commentary, noting that there was no certainty either that Biden would be able to push through quickly a stimulus spending bill of nearly $2 trillion to fight the pandemic.

Stimulus spending, aimed at economic recovery, typically boosts markets, and oil had joined other commodities and stocks in rallying earlier this week on Biden’s proposal.

Yet, the problem for the Biden administration is the razor-thin majority of one held by Democrats aligned with the president in the new U.S. Senate. 

Since stimulus measures are an integral part of the U.S. budget, without a super-majority of 67 out of the 100 seats in Senate, they run into a process called “reconciliation” that can only be overridden by a minimum of 60 votes (Democrats and Republicans both have 50 seats in the Senate now, with incoming Vice President Kamala Harrris having an additional vote to break the tie). 

This reconciliation bit has led to concerns that large stimulus efforts by Biden won’t easily pass muster with the Senate, especially with Republican fiscal hawk Mitch McConnell returning as Minority Leader to make legislation in the upper chamber of Congress as trying for the Democrats as it was when he presided as Majority Leader.

On the crude inventory front, the Energy Information Administration reported a build of 4.35 million barrels for the week ended Jan. 15. It was the first stockpile increase for U.S. crude since the week to Dec. 7 and bucked market expectations for a draw of 1.17 million barrels.

Contributing to the crude build here is a huge slump in U.S. crude exports, which fell by nearly 750,000 bpd, or barrels per day. But to offset some of the slack in exports, the United States also took in less imports last week, to the measure of 194,000 bpd, the EIA data showed.

On the fuel products front, gasoline registered a draw of just over a quarter million barrels versus an expected build of 2.8 million. That came after a total build of 9 million barrels over the previous two weeks. 

For diesel-led distillates, the build was less than half a million barrels versus expectations of a rise of 1.2 million. Distillate inventories have risen 14.5 million barrels over four weeks now.

Besides the U.S., the outlook for oil was getting worrying on the international front as well, with Iran officials reporting on Friday that they were ramping up production with the end of tight policing done on the regime by the previous Trump administration’s sanctions.

Iran once sent out more than 3 million barrels per day around the world, and although its crude shipments were at a fraction of that now, it could regain its export momentum for oil very quickly. It is something to be watched carefully, given the impact Iran could have on the stage-managed output of the global oil alliance OPEC+, and the broader impact on oil prices.

Oil Hit With Biggest One-Day Loss in Week After US Crude Build
 

Related Articles

Oil prices rise after robust China data
Oil prices rise after robust China data By Reuters - Apr 13, 2021 12

By Shadia Nasralla LONDON (Reuters) -Oil prices rose on Tuesday after strong Chinese import data but markets broadly shrugged off Middle East tensions which have so far not...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (10)
Nigel Ng
TradePA Jan 22, 2021 10:40PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Oil is back
Alan Rice
Alan Rice Jan 22, 2021 1:25PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
The new "going out to lunch with my family": My Jetta crammed with 5 people eating in Wendys parking lot ?? ( I don't think so.)
Devrim Demir
Devrim Demir Jan 22, 2021 1:10PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
100$ is coming, mostly news are scam.
Alan Rice
Alan Rice Jan 22, 2021 1:10PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
The Earth is really flat.
Me comment
Me comment Jan 22, 2021 12:57PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
And what do they expect when travel ids down 70%.
Steffen vdm
Steffen vdm Jan 22, 2021 12:54PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Who is in charge of making these predictions? One of the trainees at the EIA? Not the first time this happens
Lonnie Shelton
Lonnie Shelton Jan 22, 2021 11:27AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
they purposely time these releases to benefit those with money and power. i guarantee that certain individuals knew about this when it would have regularly been reported.
NS cooking
NS cooking Jan 22, 2021 11:16AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
it mean oil going high? to 60$
Edgar Antonio MAYORAL MANCERA
Edgar Antonio MAYORAL MANCERA Jan 22, 2021 11:16AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
inventories rising is a bearish sign
Edgar Antonio MAYORAL MANCERA
Edgar Antonio MAYORAL MANCERA Jan 22, 2021 11:16AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
inventories rising is a bearish sign
MAdeel WaRiS
MAdeel WaRiS Jan 22, 2021 11:16AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Charles Enang
Charles Enang Jan 22, 2021 11:16AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
No my dear. It means the opossite. Oil is going to fall drastically over the coming days
Don Blade
Don Blade Jan 22, 2021 11:16AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Biden should help the prices of oil.gas soon..   USA will pay what the south americans pay..  GLOBAL collusion is coming - "US" we are the cattle
Fozzy Ferdinand
Fozzinand Jan 22, 2021 11:14AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Oil and shale trying to pump as much out as they can before Biden admin regulates them into bankruptcy.
daji blackwell
daji blackwell Jan 22, 2021 11:09AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
So what exactly does this mean?
Olton Guynes
Olton Guynes Jan 22, 2021 11:09AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Consumer pay more to keep the price high
Michael Cruz
Michael Cruz Jan 22, 2021 11:09AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
usually correlated to inflation
RT HOWE
RT HOWE Jan 22, 2021 11:09AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
They are pumping as much as possible since the anti-oil forces will decrease the reserve, making existing supplies more valuble.
Sunil Kumar Dixit
Sunil Kumar Dixit Jan 22, 2021 11:09AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Higher than expected inventory build up usually leads to lower prices.
Kyle Wheeler
Kyle Wheeler Jan 22, 2021 11:09AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
It means you should buy puts. Thank me later.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email