Crude Lower As US Stocks Continue To Build

Oil prices fell on Wednesday after EIA data confirmed there was another large US stock build last week. Supply and demand fundamentals have been driving prices again as there has been little change on the geopolitical front. A slightly stronger US dollar also weighed on crude (USD +0.15%).

• WTI is down 0.8% to $78.25/bbl, above the intraday low of $77.78 from the European morning. Before the EIA data it rose to a high of $79.62, which is now initial resistance, driven by expectations of an extension in OPEC cuts. The benchmark is still 3.4% higher this month. Initial support is at $75.69, 50- day EMA.
• Brent is trading below $82 after rising above $83 earlier. It is down 1% to $81.86. The benchmark fell to $81.56 and then rose to a high of $83.13. It is now up 2% in February. Key resistance is at $84.17, while key support is at $76.62.
• EIA crude stocks rose a more-than-expected 4.2mn barrels last week after 3.5mn the previous week. Gasoline fell 2.83mn and distillate -0.5mn but refinery utilisation rose almost 1pp to 81.5% resulting in increased product output.
• There have been growing expectations that OPEC+ will extend output cuts into Q2 and possibly to the end of the year. Russia’s Novak said that it is still too early to discuss quotas for April. A decision is expected in early March.
• China’s oil demand is forecast to rise only 1% in 2024, according to a CNPC report.