Brent eases after API reports US crude inventory build
The front-month ICE Brent contract has declined by $9.98/bbl on the day, to trade at $102.62/bbl at 09.00 GMT.
IMAGE: Crude oil storage units. Getty Images
Upward pressure:
Brent’s price has remained well-supported by the latest developments in the Middle East war.
Overnight, an oil tanker – leased to Qatar’s state-owned energy firm QatarEnergy – was hit by an Iranian missile, while sailing in Qatari waters, Reuters reported citing the country’s defence ministry.
Two of the three Iranian missiles targeting Qatar were intercepted, while one hit the Aqua 1 oil tanker, the report added. The vessel was located 17 nautical miles north of Qatar's Ras Laffan port, the United Kingdom Maritime Trade Operations (UKMTO) said.
“Brent crude gained in early trading after reports of another attack on an oil tanker,” ANZ Bank’s senior commodity strategist Daniel Hynes said. “This signalled a deepening Middle East conflict that shows little sign of nearing a resolution,” he added.
The effective closure of the Strait of Hormuz due to the conflict has started impacting global economies, according to government reports.
“The conflict, which is now in its fifth week, has caused extensive infrastructure damage,” Hynes said.
Downward pressure:
Brent crude’s price has declined following a significant build-up in US crude stocks.
US crude oil inventories rose by 10.3 million bbls in the week ending 27 March, according to estimates from the American Petroleum Institute (API), cited by Trading Economics.
The crude stock build was “far above expectations for a 1.3mb [1.3 million b/d] build,” two analysts from ING Bank said.
A build in US crude stocks typically indicates lower demand for oil and can put some downward pressure on Brent's price.
By Aparupa Mazumder
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