Oil Trades Near Seven-Week Low After US Crude Inventories Surge

Oil Trades Near Seven-Week Low After US Crude Inventories Surge

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(Bloomberg) — Oil was little changed after plunging on a big jump in US crude inventories that added to concerns about weakening demand.

Brent for July traded below $84 a barrel after slumping to the lowest since mid-March in the prior session, while West Texas Intermediate was near $79. US crude stockpiles jumped 7.3 million barrels last week, the most since early February, according to data released by the Energy Information Administration.

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Oil has lost more than 5% this week after last month soaring to the highest since October following Iran’s unprecedented attack on Israel. The decline comes on signs of easing tensions in the Middle East — including the prospect of a historic pact between Washington and Riyadh — and worries that the Federal Reserve will keep rates high and further damp demand in fuel markets at the onset of the summer driving season.

“Demand concerns came into the limelight for oil traders as EIA data showed a surge in crude stockpiles and Fed Chair Powell hinted at the delay in starting the easing cycle,” Charu Chanana, head of FX strategy at Saxo Capital Markets Pte, said in a note. Some of the geopolitical premium for oil has also eroded, she said.

On the supply side, OPEC has failed to complete its latest cutbacks. Iraq and the United Arab Emirates continue to pump several hundred thousand barrels a day above their agreed limits, according to a Bloomberg survey. 

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