Oil futures lost ground Wednesday after data from an industry trade group showed a rise in U.S. crude inventories and a news report said the topic of a joint release of crude supplies was discussed by President Joe Biden and Chinese leader Xi Jinping in a virtual meeting earlier this week.
West Texas Intermediate crude for December delivery
CL00,
CLZ21,
fell 51 cents, or 0.6%, to $80.25 a barrel on the New York Mercantile Exchange. January Brent crude
BRN00,
BRNF22,
the global benchmark, was down 43 cents, or 0.5%, at $82 a barrel on ICE Futures Europe.
The South China Morning Post reported that the U.S. had asked China to release oil reserves to help tamp down international prices and that the topic came up during the Biden-Xi virtual summit late Monday.
Investors in recent weeks have been weighing the prospect of a potential release from the Strategic Petroleum Reserve by the Biden administration.
“The hesitation appears to be because the market outlook is more comfortable in 2022, while an SPR release would also only offer short-term relief to the market,” said Warren Patterson, head of commodities strategy at ING, in a note.
“In addition, if the U.S. were to make an SPR release, there is always the potential for OPEC+ to counter this by delaying their supply increases,” he said.
Traders were also awaiting the U.S. Energy Information Administration’s official weekly data on oil and product inventories after the American Petroleum Institute late Tuesday said that U.S. crude inventories rose by 655,000 barrels in the week ended Nov. 12.
The API also reportedly showed a weekly inventory decline of 2.8 million barrels for gasoline, but distillate stockpiles edged up by 107,000 barrels. Crude stocks at the Cushing, Okla., delivery hub, meanwhile, fell by 491,000 barrels for the week, sources said.
On average, the EIA is expected to show crude inventories down by 2.5 million barrels, according to a survey of analysts conducted by S&P Global Platts. The survey also calls for supply declines of 100,000 barrels for gasoline and 1.3 million barrels for distillates.
This post was originally published on Market Watch
