Oil down, slashing weekly gains over massive build in US gasoline stocks
US gasoline inventories increase by 5.9 million barrels, feeding investor jitters over demand fall in world’s largest oil consumer
Oil prices were down on Friday, erasing weekly gains after an unexpected build in gasoline stockpiles in the US, the world’s largest oil-consuming country, luring investors to cash out and benefit from high oil prices.
International benchmark Brent crude was trading at $86.81 per barrel at 0656 GMT for a 1.77% decrease after closing the previous session at $88.38 a barrel.
American benchmark West Texas Intermediate (WTI) was at $83.92 per barrel at the same time for a 1.90% loss after trade in the previous session ended at $85.55 a barrel.
The oil price slump was driven by massive increases in US gasoline and crude oil stocks.
Gasoline inventories in the country increased by 5.9 million barrels during the week ending Jan. 14, reaching their highest since February 2021, while crude oil inventories rose by 500,000 barrels to 413.9 million barrels, far above the market expectation of a 1.4 million-barrel drop.
Signaling declining demand in the US, such a large inventory build encouraged investors to capitalize on high price gains as they rose to the highest levels seen in the last seven years.
Prices were well-supported this week over rising tension in the UAE after three fuel tanker trucks exploded in the industrial Musaffah area in the capital Abu Dhabi on Monday. In retaliation, with a Saudi-led coalition airstrike, a Houthi commander in Sanaa, the capital of Yemen was killed on Tuesday.
Rising tension in the Ukraine is also exerting upward pressure on prices.
Tensions between Ukraine and Russia are at an all-time high, with a Russian force build-up along the two countries' borders, raising concerns of an invasion.
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