Oil prices have dropped due to massive weekly gasoline and distillate stock builds, which overshadowed a larger-than-expected crude stock draw. Brent crude settled down 66 cents, or 0.8%, to $77.59 during the session, while US West Texas Intermediate crude futures settled down 51 cents, or 0.7%, to $72.19.
Low fuel demand and large inventory increases in data from the US Energy Information Administration weighed on prices. Gasoline stocks rose by 10.9 million barrels to 237 million barrels, their highest week-on-week rise in over 30 years.
Distillate stocks rose by 10.1 million barrels to 125.9 million barrels, with distillate product supplied falling to its lowest level since 1999. The key Northeast region is still indicating relatively mild temperatures, likely limiting diesel gains. Crude inventories drew by 5.5 million barrels in the week, largely due to shipping disruptions in the Red Sea.
The situation in the Red Sea has forced refiners and buyers of crude oil to go to the United States rather than sail around the Horn of Africa. Downbeat economic data sent prices lower earlier in the session, with Eurozone business activity shrinking in December and German inflation rising.
Both oil benchmarks gained about 3% on Wednesday, and oil found support from American Petroleum Institute data showing crude stocks fell by 7.4 million barrels, double the expected drawdown.
Tags Crude oil fuel demand oil reserves RED SEA WTI
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