Oil Extends Drop From Seven-Year High as U.S. Stockpiles Expand




  • In Business
  • 2022-01-21 00:46:20Z
  • By Bloomberg
 

(Bloomberg) -- Oil extended its decline from the highest level since 2014 -- following a decline in U.S. stocks -- after a surprise gain in American crude stockpiles and a larger than expected increase in gasoline supplies.

Most Read from Bloomberg

  • Early Omicron Breakthroughs Show mRNA Vaccines' Weakness

  • Why Some Vaccinated People Resist Omicron and Others Don't

  • Late Rout in Tech Sends Nasdaq 100 Into Correction: Markets Wrap

  • Thailand to Resume Quarantine-Free Tourism as Covid Eases

  • Biden Expects Russia to 'Move In' on Ukraine; Warns of Sanctions

Futures in New York fell more than 2% in early Asian trading to below $84 a barrel. Crude inventories rose for the first time in eight weeks, while gasoline stockpiles expanded by more than double the median forecast in a Bloomberg survey, according to government data. The White House also said it can work to accelerate the release of strategic oil reserves after prices rallied.

While oil is extending its drop for a second session, the market is showing signs of significant tightening on robust demand and supply outages. Buyers in Asia are paying higher premiums for cargoes and Morgan Stanley has joined Goldman Sachs Group Inc. in forecasting $100 crude in the third quarter.

"We've been seeing some good gains this week, it's not surprising we are seeing a bit of a pullback," said Daniel Hynes, senior commodities strategist for Australia & New Zealand Banking Group Ltd. "The outlook is still pretty bright, however, nothing has fundamentally changed."

Oil's rally, however, poses a challenge to consuming nations and central banks as they try and stave off inflation while supporting economic growth. The Biden administration this week renewed its pledge to tackle higher prices.

U.S. crude stockpiles expanded by 515,000 barrels last week, according to the Energy Information Administration. Gasoline inventories rose by 5.87 million barrels, compared with a 2.6-million barrel gain forecast in the survey.

Most Read from Bloomberg Businessweek

  • Microsoft Makes a $69 Billion Down Payment on the Metaverse

  • Wall Street Traders Muscle Into the Middle of Crypto

  • One Year Into His Term, Biden Finds Himself Boxed In on China

  • Work From Home Is Becoming a Permanent Part of How Jobs Are Done

  • One Year Into His Presidency, Biden Hits a Wall. Can He Recover?

©2022 Bloomberg L.P.

COMMENTS

More Related News

BitMEX Founder Hayes Avoids Prison on Bank Secrecy Charge
BitMEX Founder Hayes Avoids Prison on Bank Secrecy Charge
  • US
  • 2022-05-20 23:22:41Z

(Bloomberg) -- BitMEX co-founder Arthur Hayes was spared from prison despite admitting he failed to guard against money laundering at the pioneering...

Retailer Rout Erased $500 Billion, Stirs Worry of More Ahead
Retailer Rout Erased $500 Billion, Stirs Worry of More Ahead

(Bloomberg) -- The wild swings in consumer stocks this week that erased about $500 billion in market value are far from over with earnings reports from well-...

'It's a Buyers Strike': Investors Weigh In on Bear Market Plunge

(Bloomberg) -- From Apple Inc. to Tesla Inc., some of the biggest names in the S&P 500 Index are fueling a relentless selloff that briefly pushed the broad...

S&P 500 Headed for Bear Market as Losses Exceed 20% From High
S&P 500 Headed for Bear Market as Losses Exceed 20% From High

(Bloomberg) -- A two-year run in stocks that began at the depths of the coronavirus panic and became one of most powerful bull markets on record is on the...

Melvin Investors Irate Over Fair-Weather Fund
Melvin Investors Irate Over Fair-Weather Fund's Shutdown

(Bloomberg) -- Melvin Capital Management's traders pocketed hefty performance fees over a half-decade while achieving roughly 30% in annualized gains. Now...

Leave a Comment

Your email address will not be published. Required fields are marked with *

Cancel reply

Comments

Top News: Business