Crude futures extend losses as US distillate stocks rise

17 April 2013 17:36  [Source: ICIS news]

LONDON (ICIS)--Crude oil futures weakened further on Wednesday, falling by by more than $2.00/bbl (€1.52/bbl) as a result of pressure from demand growth concerns, weaker stock markets, falling construction output in Europe and rising distillate stocks in the US.

By 11:43 GMT, the front-month June ICE Brent contract touched an intra-day low at $97.85/bbl, a loss of $2.06/bbl compared to the previous settlement. The contract then edged higher to trade around $98.00/bbl.

At the same time, the front-month May NYMEX WTI contract was trading around $87.00/bbl, having touched an intra-day low at $86.81/bbl, a loss of $1.91/bbl compared to the settlement on Tuesday.

Crude futures extended losses on Wednesday after the US Energy Information Administration published its weekly stock report which showed a fall in crude stocks, but the unexpected build in distillates added downward pressure.

Construction output fell by 0.8% in the eurozone in February month on month, according to a press release issued by statistics agency Eurostat on Wednesday.

EU construction output saw a contraction of 0.4% during the same period.

Stock markets were showing a mixed picture on Wednesday, as some stocks indexes settled in negative territory – such as China’s Shanghai Stock Exchange and Hong Kong’s Hang Seng Index, however, Japan’s Nikkei 225 gained.

In Europe the UK’s FTSE 100, Germany’s DAX and France’s CAC 40 were all trading below Tuesday’s closing values.

Oil demand growth in 2013 was downgraded recently by both oil cartel OPEC and the International Energy Agency.

Both attributed weaker demand growth to ongoing political and economic challenges facing Europe, in particular the eurozone.

($1 = €0.76)

By: Kawai Wong
+44 20 8652 3214

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