Oil prices drop on surprise build in U.S. crude stocks
Oil prices fell on Wednesday after industry data showed a surprise build in U.S. crude stocks last week as a deep freeze in the southern states curbed demand from refineries that were forced to shut, Reuters reports.
Crude stockpiles rose by 1 million barrels in the week to Feb. 19, the American Petroleum Institute (API) reported on Tuesday, against estimates for a draw of 5.2 million barrels in a Reuters poll.
API data showed refinery crude runs fell by 2.2 million bpd.
U.S. West Texas Intermediate (WTI) crude futures were down 56 cents or 0.9% at $61.11 a barrel at 0506 GMT, after slipping 3 cents on Tuesday.
Brent crude futures fell 35 cents, or 0.5%, to $65.02 a barrel, erasing Tuesday’s 13 cents gain.
But Brent may rise into a range of $66.45-$66.97 per barrel again, as suggested by its wave pattern and a projection analysis, said Reuters technical analyst Wang Tao.
“The key question is how quickly does U.S. oil supply recover,” Commonwealth Bank analyst Vivek Dhar said.
“It looks like supply will recover faster than refineries, and supply is going to outpace demand in the next few weeks. That will give negative weight to the market.”
Investors will be awaiting confirmation from the U.S. Energy Information Administration later on Wednesday that crude inventories rose last week, despite the hit to shale oil production amid the unprecedented icy spell in the U.S. south.