Oil Slides on U.S. Stockpile Numbers
Oil futures were lower on Thursday afternoon in Asia after the American Petroleum Institute published data on Wednesday that showed a jump in U.S. crude inventories by 10.5 million barrels to a total of 432.5 million barrels last week. Analysts had predicted a rise of 2.8 million barrels. The data was released a day late this week due to the Columbus Day holiday on Monday, the Energy Information Administration will release its weekly report later on Thursday which is expected to show a rise in crude inventories by 4 million barrels and a decline in gasoline stockpiles by 1.8 million barrels, according to MarketWatch. However, if the EIA confirms the API’s numbers, it would mark the largest inventory advance since February 2017.
U.S. WTI futures were down 0.79 percent as of 12:39 p.m. HK/SIN on Thursday, to $52.94 per barrel. Brent crude futures were down 0.67 percent to $59.02 per barrel. The decline in oil prices was tempered by comments from Treasury Secretary Steven Mnuchin who announced that the United States and China are working on Phase 1 of the trade deal, and that he’s prepared to fly to China if necessary. A trade deal between the two countries would increase demand for oil and help prop prices up. Likewise, news that the U.S. is closer to a trade deal with Europe also prevented oil prices from dropping further. According to some Bloomberg analysts, the resolution or continuation of the trade disputes between the U.S. and its trade partners will likely have a stronger, longer-term impact on oil prices than weekly stockpile numbers, because these trade disputes will determine the long-term global demand for oil.
On Wednesday, U.S. President Donald Trump said that he was in talks with “some new people” in Europe about the ongoing trade disputes. Washington is currently planning to implement fresh tariffs on imported goods from the EU at the end of this week as a countermeasure for the World Trade Organization’s (WTO) decision to allow subsidies for European aircraft manufacturer Airbus. Trump has threatened additional tariffs on European goods by November 14th if a trade deal is not reached.
The U.S. dollar index was unchanged in the early Asian afternoon, with little movement against all of the greenback’s major trading partners. The dollar eased modestly against the yen, down 0.01 percent to 108.74. The British pound was 0.08 percent lower against the dollar, trading at $1.282, while the euro eked out a 0.05 percent gain against the greenback to trade at $1.1076.