Vienna, Austria (BBN) – Crude prices traded weaker in Asia Thursday as investors kept an eye on tensions between Iran and the US over a ballastic missile test this week by Tehran after overnight gains on growing evidence of compliance with coordinated cuts to global oil production of 1.8 million barrels per day for the first six months of the year by OPEC and non-OPEC nations.
On the New York Mercantile Exchange, crude oil for delivery in March eased 0.59 per cent to $53.56 a barrel, while on the Intercontinental Exchange in London, Brent oil for March delivery was last quoted flat at $56.59 a barrel, reports
Markets in China were shut for the Lunar New Year holidays.
US National Security Advisor Michael Flynn said late Wednesday the White House has put Iran “on notice” over the missile test, raising concerns over steps that could hobble Iran’s efforts to revive its oil and gas industry, spark conflicts along oil supply routes and drive crude prices higher.
Overnight, crude oil inventories in the US showed a higher than expected 6.5 million barrels build at the end of last week, the Energy Information Administration (EIA) said on Thursday, well above the 2.6 million barrels build seen while stocks at the Cushing, Oklahoma, hub rose by 530,000 barrels.
Gasoline stocks rose by 3.87 million barrels and distillate supplies rose by 1.57 million barrels.
The American Petroleum Institute (API) said late Tuesday that crude inventories jumped 5.8 million barrels at the end of last week, while distillate stocks rose 2.3 million barrels and gasoline supplies by 2.9 million barrels and stocks at Cushing fell by 900,000 barrels.
Elsewhere on the demand side, The Federal Reserve held its fire on interest rates as widely expected on Wednesday, but was optimistic on the outlook for the economy in keeping its benchmark overnight lending rate target at 0.5 per cent to 0.75 per cent following a 25 basis point hike in December.
“Measures of consumer and business sentiment have improved of late,” the committee said in its statement, using new language that jibes with voices on Wall Street following the election of Donald Trump as president.
“Job gains remained solid and the unemployment rate stayed near its recent low,” the statement said, reflecting just a minor tweak from language at the December meeting.