Oil Falls After US Crude Stockpiles Swell Most Since November

(Bloomberg) — Oil fell after US crude inventories increased the most since November, swelling even more than an industry-funded report had indicated they would.

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West Texas Intermediate slipped below $78 a barrel after earlier rising as much as 1.2%. US crude stockpiles increased 12 million barrels last week, bringing inventories to the highest levels since mid-December, the US Energy Information Administration said Wednesday. The gain was bigger than the 8.5 million-barrel increase the industry-funded American Petroleum Institute projected on Tuesday.

So far this week, oil has been gripped by conflicting signals. On the one hand, gauges of market volatility continue to grind lower as prices remain trapped within a $10 band. On the other, some indicators are looking more positive, with fuel margins steadily improving and key timespreads rallying, an indication of tight supplies.

OPEC’s top official said Tuesday that global oil demand is set to expand strongly, while a monthly outlook from the group revealed limited compliance with the members’ latest round of supply cuts. Separately, the Paris-based International Energy Agency flagged comfortable markets this year, with projected supply growth more than satisfying worldwide consumption.

“Oil has weathered the financial storm decisively, but copious upside potential might be too much of an ask,” said Tamas Varga, an analyst at brokerage PVM.

In related markets, refined products have been strengthening. Benchmark futures for diesel and gasoline have both advanced to the highest levels since October, posting double-digit percentage gains so far in 2024. Crude, in contrast, is about 7% higher this year.