OIL prices fell on Wednesday (Jan 29), with the US benchmark settling at its lowest year to date, after domestic crude stockpiles in the world’s top petroleum producer and consumer rose more than expected last week.
Brent crude futures settled down 91 US cents, or 1.2 per cent, at US$76.58 a barrel. US crude futures fell US$1.15, or 1.6 per cent, to US$72.62, their lowest settlement price so far this year.
Crude oil stockpiles in the US rose by 3.46 million barrels last week as refiner intake slumped for a third consecutive week, data from the Energy Information Administration showed.
Analysts polled by Reuters had expected a 3.19 million barrel increase.
The White House on Tuesday reaffirmed President Donald Trump’s plan to impose 25 per cent tariffs on imports from Canada and Mexico from Feb 1. Near-term oil trade should remain choppy as investors digest the tariff threats, sanctions on Russian energy flows, and economic growth concerns in top consuming nations, UBS analyst Giovanni Staunovo wrote to clients on Wednesday.
“Considering the many prevailing uncertainties, we think a prudent approach is still warranted,” Staunovo wrote. “While we expect prices to stay supported at current levels, news flow related to Trump is likely to drive volatility in the near term.”
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The US Federal Reserve held interest rates steady on Wednesday. The Fed gave little insight on when it plans to lower borrowing costs, which could boost economic activity and oil demand.
Traders are also looking ahead to an Opec+ ministerial meeting scheduled for Feb 3, with the group’s plan to increase supply from April in focus.
Trump last week called on Opec+ to lower oil prices. The group has yet to respond, but delegates said policy changes are unlikely at the February meeting.
Supply concerns have eased after Libya’s National Oil said on Tuesday that export activity was running normally after it held talks with protesters who had demanded a halt to loadings at one of the country’s main oil ports.
“Libyan supplies will remain a risk as the country remains engaged in a civil war, but for now, the risk has been mitigated temporarily,” StoneX analyst Alex Hodes said. REUTERS
