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Crude oil futures fell for a third straight session on Wednesday, with prices falling to their lowest in three weeks, as another rise in US trade inventories and weaker economic data from China overcame tensions in the Middle East.
This was reported by the Energy Information Administration a fourth consecutive weekly increase in U.S. commercial crude inventories, rising by a higher-than-expected 2.7 million barrels for the week ending April 12, while the report also showed larger-than-expected weekly supply declines of 1.2 million barrels for gasoline and 2.8 million barrels for distillates.
Motor gasoline supplied — considered a proxy for demand — averaged 8.8 million bbl/day for the four weeks ended April 12, the lowest for this time of year since 2022, according to the analyst by DTN Troy Vincent.
“Demand concerns have returned to oil wells as traders shy away from potential Israeli-Iranian counterattack,” said Peter Cardillo of Spartan Capital.
Nymex Front-Month Crude (CL1:COM) for May deliveries is closed -3.1% at $82.69/barrel, and first-month June Brent crude (CO1:COM) ended -3.0% to $87.29 a barrel, the worst one-day percentage loss since Jan. 8 for both benchmarks.
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In China, the world’s biggest oil importer, the economy grew a stronger-than-expected 5.3% during the first quarter, but other indicators pointed to sluggish demand.
China’s industrial production in March improved 4.5% y/y, well below forecasts of 6.0% and the 7.0% gain for January-February, and March retail sales rose 3.1% y/y, missing the 4.6% growth forecast and slowing from a 5.5% gain in the January-February period.