Oil Settled as demand Concerns Address a Sudden Drop in US Inventories

Oil prices varied on Wednesday, March 17th, as concerns over volatile demand in Europe addressed hopes for a recovery in US refining activities, while industry data showed that US crude inventories fell unexpectedly last week.

Brent futures were down 7 cents, or 0.1%, to $ 68.32 a barrel after initially gaining as much as 32 cents.

US West Texas Intermediate crude futures rose four cents to $64.84 a barrel, after increasing as much as 28 cents in early trade.

The two benchmarks are witnessing turbulent trading today, as they fluctuate between positive and negative performance during Asian trading.

The market has declined over the past few days, as more European countries halted immunization from Covid-19 due to concerns about potential dangerous side effects, which could slow the recovery in fuel demand.

Trading in oil futures is as intense as it was in the early months of the Covid-19 crisis, as bettors scramble for the fall and rise of oil to hedge against price volatility.

In a positive sign, US crude inventories fell 1 million barrels in the week ending March 12, according to trade sources based on data from the American Petroleum Institute. Analysts in a Reuters poll had expected an increase of 3 million barrels.

At the same time, gasoline inventories decreased less than expected, down 926,000 barrels, compared to estimates of a decrease of 3 million barrels.