Oil Slides on IEA Demand Outlook, Surging US Crude Stocks
2/15 6:40 AM
Oil Slides on IEA Demand Outlook, Surging US Crude Stocks VIENNA (DTN) -- New York Mercantile Exchange oil futures and Brent crude traded on the Intercontinental Exchange edged lower early Thursday after the International Energy Agency revised its 2024 demand growth outlook lower to 1.22 million bpd. Front-month West Texas Intermediate futures on Wednesday posted the first daily loss in eight trading days after the Energy Information Administration on Wednesday reported commercial U.S. crude oil inventories surging by 12 million bbl last week as planned and unplanned refinery outages continued to weigh on crude demand. The IEA's latest downward revision to its demand growth outlook widened the chasm to OPEC's expectations to more than 1 million bpd. Underlying this divide are not only differing views on the speed and extent of the energy transition but also diverging assumptions about global economic growth, leading a much more bullish OPEC on Tuesday to call for 2.25 million bpd in global demand growth this year. The IEA, meanwhile, now sees the market already well balanced in the first quarter, despite strong draws to global inventories in January. Domestic crude inventories, meanwhile, rocketed to an eight-week high 439.45 million bbl on the back of record strong production and a pullback in refining activity. Crude oil throughput at U.S. refineries last week was trailing month-ago levels by 2.1 million bpd and year-ago levels by more than 500,000 bpd as utilization fell to 80.6% of operable capacity, the lowest in more than two years. Total product supplied, a proxy for demand, plummeted nearly 1 million bpd in the week ending Feb. 9, offsetting the price impact of sizable draws to gasoline and distillate fuel oil stocks. On a four-week average basis, gasoline supplied was 1% below year-ago and 8.8% below pre-COVID levels, and distillate fuel oil supplied was 2.3% and 13.7% lower, respectively. Demand concerns were echoed on the other side of the Atlantic where the Office for National Statistics this morning reported a 0.3% contraction in U.K. gross domestic product in the fourth quarter 2023. The second consecutive quarter-on-quarter decline means the country fell into a technical recession in the second half of last year. Real, seasonally adjusted GDP per capita fell to the lowest point in two years. Near 7:30 AM ET, WTI futures for March delivery fell $0.62 to $76.02 bbl, while Brent for April delivery was down $0.61 to $80.99 bbl. NYMEX March RBOB futures retreated $0.0413 to $2.2756 gallon, while the March ULSD contract slid $0.0276 to $2.7825 gallon. Karim Bastati, karim.bastati@dtn.com, www.dtn.com. (c) Copyright 2024 DTN, LLC. All rights reserved.