Oil prices steady after four per cent drop despite 6m jump in barrel stockpile
Oil prices have steadied after hitting low of $75 per barrel this morning, following yesterday’s four per cent price dive amid a continuing political crisis in Saudi Arabia.
The price of Brent crude, the global benchmark, steadied to $76.52 this afternoon after it fell to the lowest point since 24 August earlier in the day.
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The US Energy Information Administration weekly data report, which was published this afternoon and showed that stockpiles jumped by 6.34m barrels, led to a surge in volatility, analysts said.
“The report showed that stockpiles jumped by 6.34m barrels – its third large weekly build in a row, but gasoline inventories fell by much more than expected, so oil rallied as a result,” said CMC Markets analyst David Madden.
“The American Petroleum Institute (API) announcement last night showed a major build in US oil stockpiles.”
Oanda senior market analyst Craig Erlam said: “Oil is trading on the back foot again on Wednesday, after coming under intense selling pressure as stock markets around the world crumbled.
“Brent and WTI got caught up in the risk-off markets and the API release later in the day didn’t offer any chance of reprieve as it reported a huge build of 9.88m barrels, against expectations of a much smaller increase.”
Oil prices plummeted on Tuesday over geopolitical uncertainty, as top exporter Saudi Arabia is embroiled in the scandal over the death of dissident journalist Jamal Khashoggi.
Saudi energy minister Khalid al-Falih said yesterday that Saudi Arabia would step up to “meet any demand that materialises to ensure customers are satisfied”.
Read more: Oil prices fall after US crude inventories boosted by six million barrels