Oil Erases Gains With Industry Report Showing Rising U.S. Supply

Oil erased its increase after an industry report showed U.S. stockpiles grew last week, heightening concerns over lackluster consumption.

Futures retreated from the settlement price after the American Petroleum Institute was said to report a surprise 2.56 million-barrel build in domestic oil supplies, ahead of U.S. government figures Friday. Crude inventories were expected to have declined last week, according to a Bloomberg survey. The API report also showed builds in refined products.

Worldwide, fuel use is expected to take another hit as new virus outbreaks in China add to a wave of infections in Europe and other parts of the world. JPMorgan Chase & Co. cut its Chinese demand forecasts for January to March.

The U.S. “is still the biggest market in the world and it hasnt recovered all the demand loss,” said Peter McNally, global head for industrials, materials and energy at Third Bridge. Additional lockdown measures in China are also weighing on the global outlook as “Chinese demand has been one of the big drivers of improved oil fundamentals.”