Oil under pressure after unexpected US inventory build

Oil is reporting losses on both sides of the Atlantic, possibly due to an unexpected uptick in US oil inventories. 

As of writing, Brent is trading 0.16 percent or 11 cents lower at $67.13 per barrel and WTI is changing hands at $59.25 per barrel, representing a 0.30 percent or 18 cent drop on the day. 

The Energy Information Administration (EIA) data released yesterday showed the domestic crude stocks rose by 2.8 million barrels per day during the week ended March 22, bringing  figure to 442.3 million barrels, which reportedly amounts to a three-percent increase year-on-year. Noably, markets were expecting a 2.5-million-barrel decrease in inventories.

Apart from the US inventory report, the heightened US recession fears and the resulting risk aversion may be contributing to the downward momentum in crude. 

The US 10-year treasury yield fell to a 15-month low of 2.34 percent earlier today and the futures on the S&P 500 falling 0.25 percent. Most Asian indices including the Shanghai Composite are trading in the red at press time. 

Looking forward, the oil benchmarks may extend losses if the flight to safety gathers pace in the European session.