US crude inventories, coronavirus in focus

Oil prices jumped in the afternoon of Asian trading hours on Wednesday following a report that showed a smaller than expected crude inventory build stateside.

West Texas Intermediate for June delivery surged 14.1% to $14.08 per barrel. International benchmark Brent crude futures also added 4.15% to $21.31 per barrel.

The moves came after data from the American Petroleum Institute showed Tuesday that U.S. crude inventories jumped by 10 million barrels in the week to April 24  — to 510 million barrels, according to Reuters. That was lower than analysts’ expectations of a build of 10.6 million barrels, Reuters reported.

Still, in a note dated April 28, Moody’s Investors Service said it was reducing its near-term oil price assumptions for WTI as well as Brent.

“Exceptionally weak short-term prices will persist until production drops enough to ease the strain on storage facilities already operating at or close to full capacity,” said Elena Nadtotchi, vice president and senior credit officer at Moody’s. “Significant supply adjustments in due course should help to balance the market later in 2020, but the pace of the market’s rebalancing and rising oil prices will depend on demand recovery.”

Moody’s price prediction for WTI is currently $30 per barrel this year, and $40 next year. For Brent, it sees prices averaging $35 per barrel in 2020 and $45 in 2021.

Oil prices swayed wildly on Tuesday between gains and losses as investors continue to keep an eye on depleting crude storage space amid a dearth in demand. The coronavirus pandemic, which has forced countries around the world to shut down their economies temporarily as people are told to stay home, has also effectively frozen major economies globally.

WTI for June delivery fell 4 cents, or 3.4%, to settle at $12.34 per barrel on Tuesday. International benchmark Brent crude, on the other hand, gained 47 cents, or 2.35%, to settle at $20.46.

— CNBC’s Pippa Stevens and Sam Meredith contributed to this report.