Oil tumbles on surprise build in U.S. crude inventories
* U.S. crude stocks rose 6.8 mln bbls, surprising market
* Inventory build came despite record refinery runs
* World trade growth peaked in January -analysts
* U.S. sanctions against Iran to cut supply
(New throughout, updates prices, market activity and comments
By Jessica Resnick-Ault
NEW YORK, Aug 15 (Reuters) - Oil futures slid on Wednesday,
with U.S. crude settling 3 percent lower after government data
showed a surprise weekly increase in domestic crude stockpiles,
compounding worries about the global economic growth outlook.
U.S. crude futures settled at $65.01 a barrel, down
$2.03, or 3 percent. Brent crude futures were down
$1.70, or 2.35 percent, at $70.76 a barrel.
U.S. crude inventories last week rose 6.8
million barrels even though refinery crude runs hit a record
high, Energy Information Administration data showed. Crude
stocks at the Cushing, Oklahoma, delivery hub for
U.S. crude futures rose 1.6 million barrels.
Analysts polled by Reuters had expected a weekly decline.
"Crude oil processing increased sharply and reached a record
level of almost 18 million barrels per day last week," said
Carsten Fritsch, senior commodities analyst at Commerzbank. "But
this was not enough to prevent the inventory build. Or take it
this way; it prevented an even larger build."
"Adding to the weakening price backdrop are signs that a
deepening trade spat between the United States and China is
undermining oil demand."
Investors are concerned about the world economy as trade
disputes escalate between the United States and its major
The OECD's composite leading indicator, which covers the
western advanced economies plus China, India, Russia, Brazil,
Indonesia and South Africa, slipped below trend in May and June.
World trade volume growth peaked in January, and since then
has nearly halved to less than 3 percent by May, according to
the Netherlands Bureau for Economic Policy Analysis.
The United States and China have been locked in a trade
battle for months, pressuring economic activity in both
Chinese importers appear to be shying away from buying U.S.
crude oil as they fear Beijing may decide to add the commodity
to its tariff list.
Not a single tanker has loaded crude oil from the United
States bound for China since the start of August, Thomson
Reuters Eikon ship tracking data showed, compared with about
300,000 barrels per day (bpd) in June and July.
Investors were also watching the impact of U.S. sanctions on
Tehran, which analysts say could remove as much as 1 million bpd
of Iranian crude from the market by next year.
BMI Research said oil markets would "struggle for direction,
as uncertainty around both the impact on supply from the Iranian
sanctions and escalating trade tensions between the U.S. and
(Reporting by Jessica Resnick-Ault in New York, Christopher
Johnson in LONDON and Henning Gloystein in SINGAPORE;
Editing by David Gregorio and Marguerita Choy)
First Published: 2018-08-15 02:37:26
Updated 2018-08-15 21:01:39
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