WTI Crude Oil Prices Dip After API Reports Larger Build in Stockpiles
The optimism surrounding promising vaccines against COVID-19 has eased somewhat in oil markets, with WTI crude oil prices weakening as traders focus on the API report which revealed an unexpected gain in US crude inventories. At the time of writing, WTI crude oil is trading at around $45.36 per barrel.
According to the API report, crude stockpiles in the US increased by 3.8 million barrels to around 490 million barrels during the previous week. Economists had forecast a smaller build of only 127k barrels instead, and the reading once again raised concerns about weak oil demand due to the coronavirus pandemic.
In the previous session, WTI crude oil prices had strengthened by over 4% and closed at the highest level seen since early March. The rally in oil prices was supported by reports from three companies about vaccines with high levels of effectiveness, which spurred hopes that the pandemic could soon be brought under control and helping economies and oil demand around the world recover.
However, the positive mood faded as the mass rollout of vaccines could take at least a few more months. Crude oil prices, however, receive some support from this sentiment as it could convince OPEC and its allies to extend deeper production curbs for a longer period of time instead of increasing output at the beginning of 2021.
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