Oil Prices Leap as Storage Capacities Fill Less Rapidly
U.S. oil costs leaped Wednesday, trimming some of this week’s losses after U.S. stockpiles surged less than expected, and on expectations, demand will increase as some European nations and U.S. cities moved to ease coronavirus lockdowns.
U.S. West Texas Intermediate (WTI) crude futures climbed to a high of $14.40 a barrel and had been up 15.4%, or $1.90, at $14.24, paring a 27% drop over the primary two days of this week.
Brent crude futures spiked 4.6%, i.e., 93 cents, to $21.39 a barrel, adding to a 2.3% yield Tuesday.
U.S. crude inventories soared by 10 million barrels to 510 million barrels in the week to April 24, data from business group the American Petroleum Institute showed Tuesday, in contrast with analysts’ expectations for a build of 10.6 million barrels.
The market will get another learn on U.S. inventories when the U.S. Energy Info Administration releases weekly data afterward Wednesday.
While storage is rapidly filling up, production cuts by U.S. shale producers, estimated by consultants Rystad Energy at 300,000 barrels per day (BPD) for Might and June, ought to help retard flows into tanks. The U.S. is now the world’s biggest oil producer.
Governors in the U.S. state of Texas, the nation’s largest oil producer, will hold a vote on May 5 on whether or not to enact output curtailments. Delegates in the states of North Dakota and Oklahoma are analyzing ways to legally allow output reductions.