Oil prices bounce back after three days of growth

Oil futures are lower on Thursday after rising for three consecutive sessions.

The price decline came a day after official government data showed the seventh consecutive weekly rise in US crude inventories.

price action
  • West Texas Intermediate oil for March delivery CL.1,
    -1.24%

    CL00,
    -1.24%

    CLH23,
    -1.24%
    fell $1.48, or 1.9%, to $76.99 a barrel on the New York Mercantile Exchange.

  • April oil Brent BRN00,
    -1.22%

    BRNJ23,
    -1.22%,
    the global benchmark fell $1.45, or 1.7%, to $83.64 a barrel on ICE Futures Europe.

  • March gasoline RBH23,
    -1.75%
    fell 1.5% to $2.4261 a gallon, while March heating oil HOH23,
    -2.51%
    fell 3% to $2.8066 a gallon.

  • March Natural Gas NGH23,
    +2.13%
    rose 2.4% to $2.454 per million British thermal units after falling 7.3% on Wednesday.

Market Drivers

Oil prices fell after “impressive” gains over the past few days, Fawad Razaqzada, market analyst at City Index and FOREX.com, told MarketWatch. “I think it’s profit-taking.”

“If it was because of the bearish oil supply data, then prices would certainly have fallen the day before,” he said.

U.S. crude oil inventories rose 2.4 million barrels in the week ended Feb. 3, the EIA said on Wednesday, the seventh straight increase. The figure was slightly higher than the average estimate of analysts polled by S&P Global Commodity Insights and defied a 2.2 million barrel drop reportedly seen by the American Petroleum Institute, an industry trading group.

However, “strong refining volumes during the week could support the market,” Warren Patterson and Eva Manti, commodities strategists at ING, said in a note. WTI crude prices rose 1.7% on Wednesday following the release of EIA data.

Strategists at ING noted that refinery utilization increased by 2.2 percentage points to 87.9%, the highest this year, while noting that the increase in refinery throughput contributed to a significant increase in product inventories. Inventories of gasoline and distillate fuel oil increased by 5 million barrels and 2.9 million barrels, respectively.

Meanwhile, natural gas futures continued to trade higher after the US Energy Information Administration said Thursday that domestic natural gas inventories fell 217 billion cubic feet in the week ended Feb. 3.

That’s compared to the average analyst forecast of a 197 billion cubic foot decline, according to a survey conducted by S&P Global Commodity Insights.

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