Crude flipped between gains and losses as investors eyed French President Emmanuel Macron’s speech for signals on the Iran nuclear deal, which overshadowed a bearish U.S. inventory report
Futures in New York dropped as much as 0.9 percent on Wednesday before easing losses. Data from the Energy Information Administration initially took traders by surprise, showing a U.S. crude stockpile build of 2.17 million barrels last week, larger than the 1.1-million-barrel increase reported by the American Petroleum Institute. Focus quickly shifted to Macron’s speech and the lingering issues surrounding an Iran nuclear deal.
“The overarching thing that’s going on here is Iran and the countdown to May 12,” said Rob Thummel, managing director at Tortoise, which handles $16 billion in energy-related assets. "That’s what everyone’s looking for guidance on and trading on.”
Investors are eyeing remarks from Macron, who is pushing the limits of international diplomacy, as his last-ditch appeal to salvage the Iran nuclear deal wrong-footed European allies and was met with intransigence by U.S. President Donald Trump.
West Texas Intermediate crude for June delivery slid 13 cents to $67.57 a barrel at 11:08 a.m. on the New York Mercantile Exchange. Total volume traded was about 10 percent above the 100-day average.
Brent crude for June delivery dropped 42 cents to $73.44 a barrel on the London-based ICE Futures Europe exchange. The global benchmark crude traded at a $5.88 premium to June WTI.
The EIA report showed U.S. crude supplies rose to 429.7 million barrels last week, as refinery utilization ticked lower. A Bloomberg survey had called for a 2.2-million-barrel decline in crude supplies.
Gasoline supplies rose 840,000 barrels, the biggest build since late February. Oil stored at Cushing, Oklahoma, rose by 459,000 barrels last week, and crude production hit a fresh record-high. At the same time, crude exports jumped for a second week to the highest level on record.
“Crude oil exports jumped a lot. That’s pretty substantial,” Thummel said. “With where the spread is between WTI and Brent, it encourages more exports.
(Reuters)
