Oil prices slip on surprise build in US crude stocks

Melbourne

OIL prices were lower on Wednesday after industry data showed a surprise build in US crude stocks last week as a deep freeze in the southern states curbed demand from refineries that were forced to shut.

Crude stockpiles rose by one million barrels in the week to Feb 19, the American Petroleum Institute (API) reported on Tuesday, against estimates for a draw of 5.2 million barrels in a Reuters poll. API data showed refinery crude runs fell by 2.2 million barrels per day (bpd).

Brent crude futures slipped by six US cents, or 0.1 per cent, to US$65.31 a barrel at 7.48am GMT, but narrowed losses earlier in the session that sent it to as low as US$64.80.

US West Texas Intermediate (WTI) crude futures were down 29 US cents or 0.5 per cent at US$61.38 a barrel, after trading as low as US$60.97 earlier on Wednesday. But Brent may rise into a range of US$66.45 to US$66.97 per barrel again, as suggested by its wave pattern and a projection analysis, said Reuters technical analyst Wang Tao.

"It looks like supply will recover faster than refineries, and supply is going to outpace demand in the next few weeks," said Commonwealth Bank analyst Vivek Dhar. "That will give negative weight to the market."

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Prices have jumped due to the US supply disruption and supply discipline by the Organization of the Petroleum Exporting Countries and allies, together called Opec+, led by an extra cut of one million bpd by Saudi Arabia. REUTERS