WTI crude oil held below $86 per barrel on Thursday after losing more than 7% in the past three sessions, pressured by a larger-than-expected build in US crude stocks and inventories and China’s ongoing battle against resurgent Covid outbreaks.
Official data showed that US crude stocks rose by 3.93 million barrels last week, higher than forecasts for a 1.36 million barrel build. Meanwhile, fresh Covid outbreaks in top crude importer China stoked fears that authorities would be emboldened to stick with the zero-Covid policy, dashing hopes for a gradual economic reopening and a rebound in energy demand.
Uncertainty about China’s outlook added to fears that an aggressive tightening campaign by central banks in developed economies will drag the world into a recession. Still, the supply outlook remained tight as OPEC+ reduced output by 2 million barrels a day in November,
China’s escalating virus resurgence stoked fears of potential new lockdowns, dashing hopes for a gradual economic reopening and rebound in energy demand.
Meanwhile, industry data showed that US crude stockpiles jumped by about 5.6 million barrels last week, beating expectations for a 1.1 million barrel rise. US gasoline inventories also rose by about 2.6 million barrels despite forecasts for a 1.1 million barrel drawdown.
While the European Union is set to ban Russian crude imports by Dec. 5 and Russian oil products by Fed. 5, also Still, the supply outlook remains tight as OPEC+ reduced output by 2 million barrels a day in November, while the European Union ban on Russian oil is set to take effect in December.
