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US oil stocks draw as gasoline demand rebounds -EIA
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Russian deputy PM says OPEC+ remains efficient tool
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U.S. consumer confidence falls to nine-month low in April
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Russian refineries increase output as fuel exports rise
By Laila Kearney NEW YORK, April 26 (Reuters) -
Oil prices dropped by almost 4% on Wednesday, extending the
previous session's sharp losses, even after a report showed U.S.
crude inventories fell more than expected, as recession fears
grew for the world's biggest economy.
Brent crude settled at $77.69 a barrel, losing
$3.08, or 3.8%. U.S. West Texas Intermediate crude settled at $74.30 a barrel, shedding $2.77, or 3.6%.
Energy Information Administration (EIA) data showing U.S.
crude inventories fell last week by 5.1 million barrels to 460.9
million barrels helped to limit the price fall, far exceeding
analyst forecasts of a 1.5 million drop in a Reuters poll.
Gasoline and distillate stocks also drew down, sinking by
2.4 million barrels to 221.1 million barrels and almost 600,000
barrels to 111.5 million barrels, respectively, the EIA said.
"The complex appears more focused on a recession that may be
well under way rather than some current EIA statistics that have
generally been tilting bullish," said Jim Ritterbusch of
consultancy Ritterbusch and Associates.
A forecast of higher refinery activity, but lower crude
exports, will continue a push and pull for weeks.
"Refinery runs are set to climb in the weeks ahead, boosting
the demand side of the ledger, but countering this is the
expectation of lower crude exports, as the tightening of the
Brent-WTI spread weighs on buying appetite," Matt Smith, lead
oil analyst for the Americas at Kpler, said.
Oil prices have erased all their gains since the
Organization of the Petroleum Exporting Countries (OPEC) and
producer allies such as Russia, known collectively as OPEC+,
announced in early April an additional output reduction until
the end of the year.
Russian Deputy Prime Minister Alexander Novak said on
Wednesday that OPEC+ remains an efficient tool for coordination.
Oil prices fell more than 2% on Tuesday as lingering
economic concerns and expectations of further interest rate
hikes that could curtail fuel demand growth countered signs of
improving short-term consumption gains.
U.S. consumer confidence dropped to a nine-month low in
April as worries mounted, heightening the risk of the economy
falling into recession this year. New orders for key
U.S.-manufactured capital goods also fell more than expected in
March and shipments declined.
"This (data) will add credence to claims that the U.S.
economy is edging closer to a recession," said PVM Oil's Stephen
Brennock.
Investors also are concerned potential interest rate hikes
by inflation-fighting central banks could slow economic growth
and dent energy demand in the United States, Britain and the
European Union.
The U.S. Federal Reserve, the Bank of England and the
European Central Bank are all expected to raise rates at their
coming meetings. The Fed meets over May 2-3.
(Additional reporting by Ahmad Ghaddar, Muyu Xu and Stephanie
Kelly; Editing by Alexander Smith and Andrea Ricci)
