10-11-2022
(Reuters) - Oil prices fell by nearly $3 a barrel on Wednesday after data showed that U.S. crude stocks rose more than expected, and amid fears that demand for fuel will be dented by an increase in COVID-19 cases in China, the world's largest importer of crude.
Brent crude futures fell $2.71, or 2.8 percent, to settle at $92.65 a barrel. US West Texas Intermediate crude futures fell $3.08, or 3.5 percent, to $85.83 a barrel.
Both benchmarks fell about 3 percent on Tuesday.
Data from the US Energy Information Administration showed that crude inventories jumped 3.9 million barrels last week to 440.8 million barrels as oil production increased, compared to expectations of analysts polled by Reuters for an increase of 1.4 million barrels.
The Energy Information Administration said US gasoline stocks fell 900,000 barrels last week to 205.7 million barrels, compared with analysts' expectations for a 1.1-million-barrel decline. Distillate stocks, which include diesel and heating oil, fell by 500,000 barrels, a less-than-expected decline.
Last week, markets pinned their hopes on China moving towards easing Covid-19 restrictions, but at the beginning of this week health officials said they were committed to a strict approach to containing the infection.
COVID-19 cases surged in Guangzhou and other Chinese cities, with authorities asking millions of residents of the global manufacturing hub to take coronavirus tests on Wednesday.
The rise in the US dollar, which makes oil more expensive for buyers than holders of other currencies, negatively affected crude prices. The dollar rose against most of the major currencies on Wednesday as the results of the US midterm elections so far showed less progress than expected for Republicans.
Meanwhile, concerns about crude supply remain.
The European Union is due to ban imports of Russian crude by Dec. 5 and Russian oil products by Feb. 5, in response to Russia's invasion of Ukraine.