Crude Oil Prices Settle Lower as Slowing Refinery Activity To Weigh on Demand

Investing.com – WTI crude oil prices settled lower as traders continued to digest supportive comments from Saudi Arabia while expectations for a further build in product inventories weighed on sentiment.

On the New York Mercantile Exchange for March delivery fell 1.2% settle at $61.34 a barrel, while on London’s Intercontinental Exchange, lost 2 cents to trade at $64.34 a barrel.

Oil prices reversed some of their gains from Wednesday’s session as traders continued to digest recent data showing US oil producers continued to ramp up production while refinery activity continued to drop, which could add to domestic supply totals in the weeks to come.

U.S. refinery utilization dropped to 89.8% last week, the Energy Information Administration said Wednesday. The slowdown in in refinery activity comes as refiners enter a period of maintenance expected to last “almost a month,” said Michael Loewen, a commodities strategist at Scotiabank in Toronto.

Subdued refinery comes as U.S. crude output hit a record 10.27 million barrels per day, which keeps the US on track to meet the EIA’s recent estimate for domestic production to top 11 million barrels per day by year-end.

Yet, offsetting that somewhat was a slump in the dollar to 2-week lows and recent comments from Saudi Arabia.

“If we have to overbalance the market a little bit, then so be it,” Al-Falih said Wednesday.

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