COM - Crude oil ends lower on surprise U.S. crude supply build; JPM cuts price forecast
2023-06-14 16:55:11 ET
Crude oil futures closed lower Wednesday after the U.S. Energy Information Administration reported domestic crude stockpiles unexpectedly jumped by nearly 8M barrels last week, while inventories of refined fuels also increased.
Oil then extended its decline after the Federal Reserve said it would keep interest rates unchanged while indicating it is not done with its rate-hiking cycle.
Front-month Nymex crude ( CL1:COM ) for July delivery ended -1.6% to $68.27/bbl, and August Brent crude ( CO1:COM ) closed -1.4% to $73.20/bbl, the fourth loss in the past five sessions for both benchmarks.
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The IEA reported commercial crude oil stockpiles rose by 7.9M barrels to 467.1M, surprising analysts who had predicted a ~300K-barrel draw from the previous week.
Oil stored at the Cushing, Okla., hub increased by 1.6M barrels from the prior week to 42.1M barrels, the EIA said.
U.S. crude oil production remained flat at a three-year-high 12.4M bbl/day, gasoline inventories gained 2.1M barrels to 220.9M barrels, and distillate stocks jumped 2.1M barrels to 113.9M.
Separately, J.P. Morgan cut its forecast for Brent crude prices for this year to $81/bbl from $90/bbl expected earlier.
JPM's cut follows the cut earlier this week from Goldman Sachs, which now sees Brent at $86/bbl at year-end, down from its prior outlook for $95/bbl, citing higher supply from sanctioned oil exporters offsetting the recent OPEC+ and Saudi cuts with potentially underwhelming demand.
Also, the International Energy Agency forecast global oil demand growth will taper off during the next few years, as high prices and Russia's war in Ukraine speed up the transition away from fossil fuels.
More on crude oil:
- Will Saudi Production Cuts Be Enough To Offset An Uncertain Outlook For Oil Demand?
- A Few Months Away From Potential Start Of Global Energy Crisis
- Geopolitical Risk Likely To Weigh On Crude Prices
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Crude oil ends lower on surprise U.S. crude supply build; JPM cuts price forecast