Brent loses momentum as US stockpile gains

The front-month ICE Brent contract has lost by $0.36/bbl on the day, to trade at $64.51/bbl at 09.00 GMT.

IMAGE: Getty Images

Upward pressure:

Brent crude’s price has drawn support from the ongoing hostilities in the Middle East.

Conflict-related risks in Iran – a core OPEC member – have intensified after US President Donald Trump threatened action over Tehran’s crackdown on protesters.

“The US National Security Council is due to meet Tuesday to prepare options for the president,” ANZ Bank’s senior commodity strategist Daniel Hynes said.

Iran is the fourth-largest OPEC member, producing around 3.2 million b/d of crude oil.

“Oil prices are feeling the heat… on these supply disruption fears,” remarked Price Futures Group’s senior market analyst Phil Flynn.

Downward pressure:

Brent crude’s price retreated after the US Energy Information Administration (EIA) reported a sizeable increase in US crude stocks.

Commercial US crude oil inventories have increased by 3.4 million bbls to around 422 million bbls for the week ending 9 January, according to data from the EIA.

The EIA report was “relatively bearish” – marking the biggest increase in two months, according to Hynes.

A rise in US crude stocks can indicate lower demand for oil and put some downward pressure on Brent's price.

By Aparupa Mazumder

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