10 April 2013, London – Crude oil price slid towards $105 a barrel on Wednesday after US crude oil stocks rose to the highest level in more than two decades, denting the outlook
for demand in the world’s top consumer.
Data from the US Energy Information Administration, EIA, showed crude stocks building 250,000 barrels last week to reach the highest level since July 1990.
The American Petroleum Institute reported a sharper rise of 5.1 million barrels on Tuesday.
Brent crude futures slid $0.80 to $105.43 a barrel by 1448 GMT, while US crude fell $0.46 to $93.74.
“The actual physical demand, as evident from the wet barrels market, remains subdued,” said VTB Capital oil and commodities strategist Andrey Kryuchenkov.
The Organisation of the Petroleum Exporting Countries, OPEC, noted the weaker consumption by marking down its forecast for global growth in oil demand in 2013. The move in its monthly report follows a similar downward revision by the EIA.
“After a few days of short covering the oil complex is starting today’s session on the defensive after a bearish API fundamental snapshot along with a weak demand projection by the EIA,” said Dominick Chirichella of Energy Management Institute.
“The fundamentals are becoming more bearish but the technicals are improving slightly.”
Oil had been supported earlier in the session by China’s import growth and simmering tension in Iran and North Korea.
China’s total imports surged in March, suggesting recovery in the world’s second largest oil consumer was gathering momentum.
Chinese imports grew 14.1% in March, while exports climbed 10%, relieving concerns over the subdued import growth of previous months. Crude imports slipped 2.1% from a year ago, in line with market expectations.
Some analysts said the accelerating restocking process in some industries and a favourable base effect from a year ago may have flattered China’s March imports, which otherwise remain constrained by falling global commodity prices and a slower-than-expected upturn in investment demand.