Commodities: Oil futures slip as weekly US inventory data reveals unexpected build

Energy prices weakened on Wednesday following the release of a US government report on crude oil inventories showing an unexpected build in stockpiles over the latest reference week.

According to the Energy Information Administration, commercial oil inventories in the States increased by 0.8m barrels a day (consensus: -1.4m b/d).

Gasoline stockpiles also rose sharply as a result of a fall in demand, said analysts at Capital Economics.

"We expect further builds in gasoline stocks as conditions in the labour market soften in the first quarter of next year," analysts at Capital Economics said in a research note sent to clients.

"However, distillate stocks may soon fall back, ahead of the introduction of IMO 2020 rules, which should boost demand for low-sulphur diesel."

As of 1825 GMT, front month Brent crude oil futures were retreating 1.12% to $63.62 a barrel on the ICE, with NYMEX heating oil 2.07% softer at $1.9248 a gallon alongside.

Meanwhile, the US dollar spot index was exactly flat at 97.4140 while the Bloomberg commodity index was slipping 0.24% to 78.33.

Soft commodity prices were also weaker, with March 2020 corn on CBoT down by 1.39% at $3.7175/bushel and similarly-dated wheat erasing 1.24% to trade at $5.1725 a bushel.

Among industrial metals on the other hand, three-month LME copper advanced from $6,086 per metric tonne to finish at $6,156 per tonne, while on COMEX the March contract added 0.87% to $2.7895 a pound.

That was despite analysts at Barclays cutting their copper price forecasts for 2021 and 2022 by 13.0% and 16.0%, to $2.86/lb. and $2.76/lb., respectively, and by 11.0% to $3.10/lb. for the long-term.

LME nickel also gained ground, advancing to $13,850 per tonne after starting the session out from $13,425.