Oil prices fell for a second day on Thursday, after the U.S. government reported another record high in crude inventories, but prices bounced sharply off session lows on relief the builds were less than an industry group had estimated. Prices also retraced losses as investors covered more short positions in U.S. crude futures a day ahead of the expiry of the front-month contract.
U.S. commercial crude oil inventories rose 7.7 million barrels last week to a record 425.6 million barrels, , the U.S. Energy Information Administration (EIA) said. It was the sixth straight week levels were at a seasonal record peak. [EIA/S] The build was more than double the 3.2 million barrels expected by analysts in a Reuters poll, but far below the 14.3 million barrels estimated on Wednesday by industry group American Petroleum Institute (API). [API/S]
Benchmark Brent and U.S. crude futures, which fell about 5 percent on Wednesday after the API report, came off session lows on the EIA data. “It is still a bearish number though it provides a little bit of a relief rally if you’d been going with the API estimate,” Tariq Zahir, managing member at New York’s Tyche Capital Advisors said, explaining why the market pared losses.