Crude Oil Soars Despite Rise in Supply, Inventories
By Adedapo Adesanya
Crude oil improved on Wednesday despite signs of ample supply, including growing crude inventories in the United States, with Brent crude futures up by 86 cents or 1 per cent to $84.31 a barrel and the US West Texas Intermediate crude (WTI) up by 64 cents or 0.8 per cent to $77.69 per barrel.
US crude inventories rose by 1.2 million barrels last week to 480.2 million barrels last week to the highest since May 2021, government data showed, beating analyst expectations of a 457,000-barrel rise. It was the 10th straight weekly increase.
The Energy Information Administration confirmed the American Petroleum Industry (API) estimate of an inventory build for the week to February 25, as it said that at 480.2 million barrels, inventories were 9 per cent above the five-year average for this time of the year.
Earlier in the week, expectations of demand recovery in China underpinned gains.
The release of new factory data from China suggested activity was picking up in line with expectations of a fast rebound from last year’s Covid lockdowns.
China’s official index showed on Wednesday that manufacturing activity expanded at the fastest pace in more than a decade, beating expectations as production zoomed after the lifting of COVID-19 restrictions late last year.
The manufacturing purchasing managers’ index (PMI) shot up to 52.6 from 50.1 in January, according to China’s National Bureau of Statistics.
This is above the 50-point mark that separates expansion and contraction in activity. The PMI far exceeded an analyst forecast of 50.5 and was the highest reading since April 2012.
In other signs of ample supply, Russia’s oil production reached the pre-sanction level for the first time in February.
Loadings of Russian Urals, its headline crude, hit a record high in the Mediterranean in January as traders moved cargoes onto larger vessels to make long-haul shipments to Asia more cost-effective.
The Organisation of the Petroleum Exporting Countries (OPEC) pumped 28.97 million barrels per day in February, up by 150,000 barrels per day from January.
However, the output is still down more than 700,000 barrels per day from September.