Crude Falls On US Stock Build, EIA Data Out Later

Crude gave up some of Tuesday’s gains early in APAC trading driven by another large US crude stock build but has recovered somewhat as geopolitical developments and the extension of OPEC cuts continue to put the market on edge. WTI is down 0.4% to $78.56/bbl, close to the intraday high, and Brent is -0.4% to $82.36/bbl. The USD is up 0.1%.

• Bloomberg reported a crude inventory build of 8.428mn barrels, according to people familiar with the API data, after +7.2mn the previous week. But product stocks continued to rundown with gasoline -3.3mn and distillate -500k. Refinery outages have resulted in crude builds and product drawdowns. Official EIA data is out later and includes refining capacity utilisation.
• The UK Navy reported a rocket exploded 3-5NM from a vessel but it is safe and will continue to its next port. The US has hit 230 targets to date in Yemen to contain attacks on Red Sea shipping. The Iran-backed Houthis have said they will only reconsider striking vessels once Israel ceases its “aggression” in Gaza. So, it seems that problems for shipping in the area are likely to continue.
• Later the Fed’s Bostic, Collins, Williams and BoE’s Mann speak. US Q4 GDP revisions are released as well as January inventories and trade balance. The European Commission February survey also prints.