Oil futures headed lower on Wednesday, pushing U.S. prices back below $50 a barrel as worries about the spread of COVID-19 outside China, and its impact on demand for crude, extinguished earlier support from a smaller-than-expected weekly rise in U.S. crude inventories.
“The commodity’s muted reaction after the EIA reported a less than expected build in crude oil inventories last week confirms how oil remains more concerned with coronavirus developments,” Lukman Otunuga, senior research analyst at FXTM told MarketWatch.
West Texas Intermediate crude for April delivery CLJ20, -1.14%[1] fell by 49 cents, or 1%, to $49.41 a barrel on the New York Mercantile Exchange. Prices had touched a low at $48.99, its lowest intraday level since January 2019 before the supply data, then briefly traded above $50 after the data.
April Brent crude BRNJ20, -1.57%[2] was down 76 cents, or 1.4%, to $54.19 a barrel on ICE Futures Europe.
Data from the Energy Information Administration on Wednesday revealed that U.S. crude supplies edged up[3] by 500,000 barrels for the week ended Feb. 21. Analysts polled by S&P Global Platts expected the data to show a rise of 2.8 million barrels. The American Petroleum Institute on Tuesday reported a climb of 1.3 million barrels.
The EIA data also showed supply declines of 2.7 million barrels for gasoline and 2.1 million barrels for distillates. The S&P Global Platts survey had shown expectations for supply declines of 1.9 million barrels for gasoline and 900,000 barrels for distillates.
In other energy trading, March gasoline RBH20, -3.13%[4] fell 3.3% to $1.4824 a gallon, while March heating oil HOH20, -3.39%[5] was off 3.4% at $1.5148 a gallon.
March natural gas NGH20, -0.11%[6] rose 0.5% to $1.856 per million British thermal units ahead of the contract’s expiration at the settlement. April natural gas NGJ20, +0.32%[7], which will become the front month, traded at $1.865, up 0.8%.
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