Oil prices continued to decline for a third session as supply concerns subsided and the U.S. stockpile of oil and gasoline grew more than anticipated. While U.S. West Texas Intermediate crude dropped by 49 cents, or 0.59%, to $83 per barrel at 0138 GMT, Brent futures declined by 41 cents, or 0.48%. Most of the …
Oil prices continued to decline for a third session as supply concerns subsided and the U.S. stockpile of oil and gasoline grew more than anticipated. While U.S. West Texas Intermediate crude dropped by 49 cents, or 0.59%, to $83 per barrel at 0138 GMT, Brent futures declined by 41 cents, or 0.48%. Most of the early-week gains on both benchmarks have been lost. According to Wednesday’s data from the American Petroleum Institute and market sources, the amount of U.S. crude oil in storage increased by around 12.9 million barrels. This was far more than the 500,000 barrel gain that economists predicted in a Reuters survey. “API inventory statistics are not likely to improve sentiment this morning…This accumulation probably resulted from lower refinery run rates because of maintenance, according to ING analysts’ client note. The data also revealed an increase in gasoline stockpiles of 3.6 million barrels, which was a sharp contrast to the analysts’ predicted 800,000-barrel decline and fed concerns about decreasing fuel demand in the U.S. Fuel costs may be more painful for consumers than inflation-adjusted prices might indicate. There are already indications that customers are responding by consuming less petrol, according to JP Morgan analysts’ client note.
The U.S. Energy Information Administration (EIA), which is scheduled to release more inventory data clues at 14:30 GMT later in the day, will be watched by the markets. Prices were under downward pressure elsewhere as market worries over the Middle East supply issue continued to fade. “Crude oil extended losses on signs the impact of the Israel-Hamas war on the oil market will be limited,” ANZ analysts wrote in a client note. According to ING analysts, “The risk premium continues to erode with the conflict largely contained to Israel and Hamas.” However, the U.S. EIA’s predictions of significant declines in global oil inventories in the second half of 2023 restrained price depreciation. The EIA stated in a monthly report that the lower stocks, which are expected to maintain the global oil supply below consumption, are likely to increase oil prices.
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