Crude oil futures price declines extended in mid-morning European trading hours Thursday, after the US Energy Information Administration reported that US crude stocks rose sharply last week.
At 1107 GMT, the December ICE Brent crude futures contract was down $1.04/b from Wednesday’s settle at $79.01/b, while the NYMEX November light sweet crude contract was down 78 cents at $68.97/b.
Oil prices were trading below the $80/b mark Thursday, as the market continued to eye the release of bearish EIA data while fears of a possible rift in diplomatic tensions between the US and Saudi Arabia diffused into the background. The EIA data, released Wednesday, showed US commercial crude stocks rose 6.49 million barrels to 416.44 million barrels in the week ended October 12, the highest point in 15 weeks.
Analysts surveyed Monday by S&P Global Platts had been expecting a more modest 1.88 million-barrel build, while inventory data reported by the American Petroleum Institute the day before had shown a reduction.
Elsewhere, despite the fall in crude futures on the back of the US inventory gains, lingering supply concerns stemming from the re-imposition of US sanctions against Iran were said to be preventing a more significant price slide.
“Hopes that part of the shortfall in Iranian oil exports will be offset by a resumption of oil production in the Neutral Zone between Saudi Arabia and Kuwait appear to be coming to nothing,” analysts from Commerzbank said in a note.
“The market therefore risks seeing supply tighten until the year’s end, so we do not believe a Brent price below $80 is justified.”
