US Crude Keeps Gains Intact Amid Larger-Than-Expected Supply Build

Crude oil futures kept their midweek gains intact despite a larger-than-expected build in US inventories. The energy commodity has been trending higher this week as investors monitor the situation in the Middle East and brace for the upcoming OPEC ministerial meeting. Can US crude top $80 in the coming weeks?

April West Texas Intermediate (WTI) crude oil futures rose $0.28, or 0.36%, to $79.15 per barrel at 15:07 GMT on Wednesday on the New York Mercantile Exchange. US crude prices are on track for a February gain of more than 1%, adding to their year-to-date rally of nearly 11%.

Brent, the international benchmark for oil prices, is eyeing $83 in the middle of the trading week. May Brent crude futures tacked on $0.04, or 0.05%, to $82.70 a barrel. Brent is poised for a monthly increase of 2.5% and is up more than 7% year-to-date.

According to the US Energy Information Administration (EIA), domestic inventories of crude oil surged 4.199 million barrels for the week ending Feb. 23, up from the previous week’s injection of 3.514 million barrels. This was higher than the consensus estimate of 2.743 million barrels.

Gasoline supplies declined by 2.832 million barrels for the fourth consecutive week. Distillate stockpiles tumbled 5110,000 barrels while heating oil inventories dropped 137,000 barrels.

Stocks at the Cushing, Oklahoma, storage facility rose by 1.458 million barrels.

In recent weeks, gas prices have been on an upward trajectory, topping $3.29 per gallon, according to the American Automobile Association (AAA).

“Old man winter is shuffling toward the exit, and with milder weather and longer days looming, the seasonal rise in gas prices is primed to begin,” said Andrew Gross, AAA spokesperson, in a statement. “But it will probably be a slow, wobbly start to rising prices.”

Meanwhile, global energy markets are paying close attention to the situation in the Red Sea where experts warn will continue to add pressure to international oil prices.

In addition, the Organization of the Petroleum Exporting Countries (OPEC) and its allies, OPEC+, are anticipated to extend production cuts beyond the first quarter. Although some analysts say that OPEC could begin to revive output later this year, there are growing rumblings that the cartel could extend production cuts for the rest of 2024.

In other energy commodities, April natural gas futures picked up $0.053, or 2.93%, to $1.861 per million British thermal units (Btu). April gasoline futures shed $0.0226, or 0.87%, to $2.5718 a gallon. April heating oil futures fell $0.0493, or 1.83%, to $2.6484 per gallon.

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