Oil Decline Despite an Unexpected Drop in US Inventories

Oil prices fell on Wednesday, February 10, threatening to end the longest rise in two years as investors ignored sector data showing lower US crude oil inventories, boosting optimism about an expected increase in global demand for fuel.

Brent crude fell cents to 61.08 dollars a barrel, after increasing about 1% on Tuesday, when it touched the highest level in 13 months. US crude fell eight cents to $ 58.28.

Brent rose for eight days in a row, the longest continuous winning streak since January 2019. US crude has won for seven days in the longest rise since February 2019.

The US Energy Information Administration said this week that it expected production in the United States to rise in the second half of 2021 and in 2022, but it revised downward its estimate of increasing production for the full year.

Data from the American Petroleum Institute on Tuesday showed that crude inventories in the United States fell by 3.5 million barrels in the week ending February 5, to about 474.1 million barrels.

This comes in comparison with analysts’ expectations in a Reuters poll for a 985,000-barrel increase. Official data from the Energy Information Administration is due for release by 1530 GMT on Wednesday.

Crude stocks at the delivery centre in Cushing, Oklahoma, fell 1.4 million barrels, according to the Petroleum Institute.

But gasoline inventories increased by 4.8 million barrels, compared with analysts’ expectations in a Reuters poll for an increase of 1.8 million barrels.

Oil prices have soared since November, as governments launched vaccination campaigns against the Corona virus while pumping out massive stimulus packages to boost economic activity.