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(Bloomberg) — Oil continued to fall sharply as weak demand fueled speculation that refiners would cut output, reducing demand for crude.
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West Texas Intermediate trades near $77 a barrel after falling 2.2% on Tuesday, tracking declines across broader financial markets as fears of a U.S. banking crisis re-emerge. Declining refining margins over the past few weeks have prompted refiners to consider cutting processing capacity.
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Crude oil is currently near levels before the Organization of the Petroleum Exporting Countries and its allies introduced a shock output cut in early April. Prices jumped after the announcement but most of the gains were erased as the prospect of a recession in the US and a poor recovery in China clouded the demand outlook.
Meanwhile, the industry-funded American Petroleum Institute reported U.S. crude stockpiles fell 6.1 million barrels last week, according to people familiar with the data, though it said every month. Inventory at the Cushing, Oklahoma storage center has increased. Official data will be available later on Wednesday.
The Federal Reserve will release its final key report on US employment, inflation and consumer spending this week ahead of its May policy meeting, which will help investors gauge the health of the economy. strength of the US economy. In addition, some of the world’s largest oil companies, including Chevron Corp. and Exxon Mobil Corp., will report first-quarter earnings on Friday.
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