Brent Remains Positive on Moderate US Stockpile Build

By Adedapo Adesanya

Brent crude futures gained 0.16 per cent or 15 cents on Wednesday to sell at $105.20 per barrel while the US West Texas Intermediate (WTI) crude futures appreciated by 0.42 per cent or 43 cents to $102.10 per barrel.

This was boosted by the report of the United States Energy Information Administration (EIA) of a modest crude oil inventory build of 700,000 barrels for the week to April 22 compared with the preceding week’s inventory decline of 8 million barrels.

At 414.4 million barrels, crude oil inventories are 16 per cent below the five-year average for the season.

This put to rest expectations put forward after the American Petroleum Institute (API) which estimated an unexpectedly large inventory build in crude oil.

The market, however, continued to face pressure from the soaring rate of the US Dollar, which makes barrels more expensive and coronavirus outbreaks in China.

The American Dollar rose to its highest in five years, making oil purchases more expensive for holders of other currencies.

In China, Shanghai’s month-long isolation has become almost unbearable for many of the city’s 25 million people.

Meanwhile, the capital of Beijing is mass testing as it tries to keep an outbreak numbering in the dozens from spiralling into a crisis like the one the locked-down city of Shanghai is enduring.

China’s zero-tolerance policy has provoked rare public anger in an important year for President Xi Jinping, over measures that look increasingly bizarre to much of the outside world that has chosen live with COVID.

Its central bank said it would step up monetary policy support as the world’s largest oil importer races to stamp out a nascent COVID-19 outbreak in the capital and avert the same type of debilitating city-wide lockdown in the financial hub of Shanghai.

The European Union continues to mull over the possibility of imposing an embargo on Russian oil.

Europe’s largest economy, Germany, which has relied heavily on Russian energy, faces a hit to economic growth as it pushes ahead with attempts to become independent of Russian gas and oil imports.