NEW YORK, Feb 9 (Reuters) – Crude oil prices edged lower on Thursday as earthquake-ravaged oil infrastructure in Turkey and Syria appeared to have escaped serious damage, while U.S. inventories rose and investors were worried about the Federal Reserve Worrying about rate hike.
Brent crude was down 59 cents, or 0.7%, at $84.50 a barrel. US West Texas Intermediate (WTI) crude futures were down 41 cents, or 0.5%, at $78.06 a barrel. Both the benchmarks are up more than 5% so far this week.
The earthquake, which has killed more than 19,000 people, initially raised oil prices on the prospect that the disaster would severely damage pipelines and other infrastructure and displace crude from the global market for an extended period. .
“We won’t lose that much supply as long as we thought,” said John Kilduff, partner at Again Capital in New York.
BP Azerbaijan declared force majeure on Azeri crude shipments from the Turkish port of Ceyhan on Tuesday after the earthquake struck early Monday. BP Azerbaijan said on Thursday that Azeri oil continues to flow through the pipeline.
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A strong US jobs report raised fears that the US Federal Reserve would continue to aggressively raise rates to ease inflation while putting pressure on riskier assets such as oil and equities.
U.S. crude stockpiles rose last week to 455.1 million barrels, the highest level since June 2021, the Energy Information Administration reported on Wednesday, which also weighed on oil prices. Gasoline and distillate inventories also rose last week, the EIA said, during the unseasonably mild winter months.
Prospects of stronger demand from China provided some support to oil prices, as the world’s second biggest oil consumer ended more than three years of strict zero-Covid policy.
“We expect Chinese oil consumption to grow by around 1.0 million barrels per day this year, with strong growth coming late in Q1,” analysts at ANZ Bank wrote in a note.
“In total, this should increase global demand by 2.1 million barrels per day in 2023.”
Brent’s front-month loading contract rose to a $3-a-barrel premium over the six-month contract, a market structure called backwardation that prompts traders to see tight current supplies.
A weaker US dollar, which generally trades inversely with oil, also helped limit losses in crude oil prices. The dollar index fell 0.7% to 102.74.
Additional reporting by Shadia Nasralla and Muyu Ju; Editing by Bernadette Baum, Jason Neely, Arun Coeur, Jane Merriman, David Gregorio and Mark Heinrich
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