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Oil Extends Drop From Seven-Year High as U.S. Stockpiles Expand

Published 21/01/2022, 02:12
Updated 21/01/2022, 02:12
© Reuters.

© Reuters.

(Bloomberg) -- Oil extended its decline from the highest level since 2014 after a surprise gain in U.S. crude stockpiles and a big increase in gasoline supplies. 

Futures in New York dropped almost 2% in early Asian trading toward $84 a barrel. Crude inventories rose for the first time in eight weeks, while gasoline stockpiles expanded by more than double the median forecast in a Bloomberg survey, according to government data. The White House also said it can work to accelerate the release of strategic oil reserves after prices rallied.

Oil is still poised to eke out a modest weekly gain, with the global market showing signs of significant tightening on robust demand and supply outages. The surge to multi-year highs poses a challenge to consuming nations and central banks as they try and stave off inflation, prompting the Biden administration to this week renew its pledge to tackle higher prices.

U.S. crude stockpiles expanded by 515,000 barrels last week, according to the Energy Information Administration. Gasoline inventories rose by 5.87 million barrels, compared with a 2.6-million barrel gain forecast in the survey.

©2022 Bloomberg L.P.

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