Oil down $1 on bearish U.S. data, crude stocks build

Melbourne, Jan. 19 (BNA): Oil futures fell as much as $1 on Thursday on recession fears as a sharp decline in US retail sales and manufacturing production clouded the demand outlook, while industry data showed a surprise jump in US crude inventories. also. Heavier on the price.

Brent crude futures were last down 82 cents, or 1%, at $84.16 a barrel at 0330 GMT, after losses of around 1% on Wednesday. US West Texas Intermediate crude futures also fell 90 cents, or 1.1%, to $78.58 a barrel, according to Reuters reports.

“Deteriorating US economic data hurt the (oil) demand outlook as recession fears escalated again. Risk sentiment drove down growth-sensitive commodities, especially oil,” said Tina Ting, analyst at CMC Markets.

“Profit-taking may also be a reason to put pressure on oil prices ahead of major US technology earnings.”

US retail sales for December fell by the most in a year, dragged down by lower purchases of cars and a host of other goods, which put consumer spending and the overall economy on a weaker growth path heading into 2023.

US manufacturing output also fell more-than-expected in December, posting the biggest drop in nearly two years, as rising borrowing costs hurt demand for goods.

However, Fed officials said rates should rise beyond 5% even as inflation shows signs of peaking and economic activity slows.

“This raised the specter of a recession, with risk appetite suffering as a result,” ANZ Research analysts said in a note to clients.

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Adding insult to injury, data from the American Petroleum Institute showed that US crude oil inventories rose by about 7.6 million barrels in the week ending January 13, according to market sources.

Nine analysts polled by Reuters estimated, on average, that crude stocks fell by about 600,000 barrels.

The large build marks the second consecutive week of significant increases in inventory.

However, distillate stocks, which include diesel and heating oil, fell by about 1.8 million barrels, compared to analysts’ expectations for an increase of 120,000 barrels.

The API report has been delayed by a day due to Martin Luther King Jr.’s Monday public holiday in the US. The State Energy Information Administration will release its weekly inventory report on Thursday.

As interest rates continued to rise sharply, the US dollar rose, affecting demand for oil as a strong dollar makes the commodity more expensive for those holding other currencies.






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