Breaking News
0
Ad-Free Version. Subscribe now to follow markets, faster and distraction-free. More details

Oil Rally Pauses After Report Points to Rising U.S. Stockpiles

CommoditiesNov 24, 2020 18:54
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters.

(Bloomberg) -- Oil edged lower after closing at an eight-month high as an industry report showing U.S. stockpiles rose last week took some of the wind out of a rally driven by optimism coronavirus vaccines will soon be available.

Futures in New York fell as much as 0.4% in early Asian trading after jumping 4.3% on Tuesday. The American Petroleum Institute reported that crude inventories swelled by 3.8 million barrels, according to people familiar with the data. That would be the third straight week of rising stockpiles if confirmed by government figures due later on Wednesday.

Crude has surged around 25% this month amid positive results for three vaccines for Covid-19. The triggering of a formal transition process to U.S. President-elect Joe Biden drove a broad financial markets rally on Tuesday, with the S&P 500 Index closing at an all-time high and the Dow Jones Industrial Average topping 30,000 for the first time.

Oil has surged on the vaccine breakthroughs even as the short-term outlook for energy demand remains grim due to a resurgent virus and more lockdown measures in Europe and the U.S. Brent’s prompt timespread flipped into backwardation -- where near-dated contracts are more expensive that later-dated ones -- earlier this week, a bullish signal that suggests the market may be moving into deficit.

One of the most significant shifts in the shape of the forward curve is the strengthening of the so-called WTI red spread, with futures for December of next year at a premium relative to December 2022. The move to backwardation often attracts passive flows into the market, leading to further price rallies.

See also: Oil Curve Flips Most Bullish in Months After Vaccine Rally

While the market may be strengthening on the outlook for improved prospects for consumption, the pandemic’s effects are still being felt. Total SE said it will halt its Donges refinery for several months as it’s currently unprofitable due to weak demand. Several refineries in the U.S. have shut because of the collapse in fuel demand.

©2020 Bloomberg L.P.

Oil Rally Pauses After Report Points to Rising U.S. Stockpiles
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email