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Crude Faces Weakness on API Build Ahead of Fed Decision

OIL

Crude is facing further weakness Wednesday ahead of the latest Fed rate decision while API figures showed a US crude build ahead of the EIA figures also out later.

  • Brent JUL 24 down -1.6% at 84.96$/bbl
  • WTI JUN 24 down -1.7% at 80.54$/bbl
  • US crude stockpiles increased by 4.9 mn bbls last week, according to the API figures.
  • Prospects for a ceasefire in the Middle East are also helping to further deflate any remaining geopolitical premium that was stoked by Israel/Iran retaliations in recent weeks that have since largely settled.
  • Ukrainian drone strikes on Russian infrastructure have proved supportive for the oil market previously but the latest attack on Russia’s major Ryazan refinery have offered little support. The extent of the damage is unclear at present.
  • Vessel tracking figures such as those from Kpler indicate OPEC+ crude exports holding up in 2024 also adding structural weight on crude.
  • The latest Reuters survey out Tuesday shows OPEC+ production broadly in line with targets in April after being 140kbd above them in March.

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