Oil and petroleum futures contract this Thursday as traders digest the US stockpile buildup report. After gaining for two consecutive days, price hikes finally halted today after the EIA’s report.
The Energy Information Agency showed an unexpected increase in the week ending on November 22. The oil inventory report said that US oil stocks rose to 1.572 million barrels last week.
The unprecedented figures upset analysts who expected a 418,000 decrease in the same week. Bear immediately regained confidence, flooring oil and petroleum prices lower.
WTI crude or West Texas Intermediate contract went down by 0.53% or 0.31 points this Thursday. WTI crude barrels went down from $58.11 to $57.80 in trading sessions.
Still, WTI trade figures are still on track to decline a week before the Thanksgiving celebration in the United States.
Meanwhile, Brent oil futures dropped by 0.43% or 0.27 points. Bret oil barrels currently cost around $64.74, jumping down from its last close of $63.01.
The unexpected hike in oil and petroleum inventories was mainly due to the massive increase in production. In the same week, the US crude production peak to a record high, pumping 12.9 million BPD.
Aside from the US crude stocks, the EIA also reported a buildup in the country’s gasoline inventories.
Gasoline stocks jumped sharply by 5.1 million barrels by last week. This shocked the market as there were projections of a 1.2-million-barrel gain prior.
The news about the US gasoline inventories further pulled oil and petroleum prices downward.
The United States has gradually moved forward to becoming a significant producer and exporter of oil in the global market. Still, US crude imports declined last week by 235,000 BPD.
Moreover, other energy inventories such as the country’s distillate futures.
US distillate stockpiles, which include heating oil and diesel, failed to reach projections according to the EIA. Distillate inventories only went up by 725,000 barrels, closing in on projections for a 750,000-barrel hike.
Despite positive news from China earlier this week, the oil and petroleum market are still weary from trade war news. Traders still fear that the two giants won’t reach a desirable agreement anytime soon.
Recently, the US National Security Advisor commented that the US will not ignore the unrest in Hong Kong. Following that, just earlier this week, Beijing hinted that it wants to separate trade negotiations from other issues.
According to the Chinese Ministry of Commerce, officials have settled via phone call the core concerns surrounding trade war.
China’s state-owned media claimed that the two sides successfully reached an agreement during their conversation. However, the news did very little to ease the concerns of the market.
What really helped push oil and petroleum prices today was the recent signing of the Hong Kong bill. As tensions escalate further, prices were pinned down lower this Thursday.
Just yesterday, the United States President Donald Trump signed the HK Human Rights and Democracy Act into law. The support caused a wave of joy to HK pro-democracy protesters but caused an ache to some trade war hopefuls.
The legislation was approved consensually by the US House of Senate and House of Representatives last week.
The law requires the US State Department to check yearly the autonomy of Hong Kong. By only then will it be deemed favorable for US trading terms.