After a three-day gain, oil prices fell on Wednesday as demand concerns were raised by an unexpected increase in US oil stocks. Investors were also waiting for US inflation statistics to see when the top oil-consuming country would decide to raise interest rates.
At 1700 IST, Brent crude decreased by 78 cents, or 1.01%, to reach $76.66 a barrel. While United States West Texas Intermediate crude likewise decreased by 77 cents, or 1.04%, to reach $72.94.
According to market sources cited by the American Petroleum Institute on Tuesday. U.S. crude stocks increased by around 3.6 million barrel in the week ending May 5. While petrol stockpiles increased by 399,000 barrels. Which may be an indication of weaker demand.
The results were contrary to eight analysts surveyed, who predicted that oil inventories would decrease by 900,000 barrels. And petrol stocks would decrease by 1.2 million barrels.
On Wednesday, US government figures on oil inventories are due. [EIA/S]
Concerns about the consumption for oil on a worldwide scale were heighten in April by the unexpected increase in U.S. inventories, reduced crude imports, and a slower growth in China’s exports.
According to Ashish Singh an Market Analyst with Shree Metal prices. “Oil investors should look out for signals on the economic situation of the Us States the economy. Which in my opinion looks very dim & bleak as of right now.”
The market is anticipating the release on Wednesday of the consumer price index data for April in the United States.
Even if the United States central bank cut its forecast for future rate hikes. New York Federal President John Williams stated that inflation remains too strong & that the bank will increase rates once more if required.
The markets is also anticipating the Organisation of the Oil Exporting Countries’ (OPEC) monthly oil report. Which is due on Thursday, for hints about whether the club and its partners will need to reduce output once more to support prices.
The production of OPEC and its partners, collectively referred to as OPEC+, will be reduce by 1.16 million barrel every day (bpd) from May until the end of the year.
According to media reports, Russia’s Energy Ministry claimed that in April. The country’s oil output drop was virtually at the desired levels.
Saudi Arabia, which promised to reduce output by 500,000 bpd starting in May, has told Asian clients that. It will provide all of the crude oil volumes asked for June.
According to sources, certain Chinese refineries may have requested less supply. Which would enable world’s top oil producer to achieve its goal of a reduced output.
Wildfires in Alberta, which is Canada’s largest oil-producing province, subsided on Tuesday as a result of lower temperatures. At least 319,000 barrel of oil equivalents every day (boepd), or 3.7 percent of the nation’s production, had to be shut in as a result of the wildfires.
Markets were also keeping an eye on Joe Biden, the president, and top Republican law makers as they discussed extending the $31.4 trillion debt ceiling for the United States because they are worried that if Congress does not act within three weeks, there will be an unprecedented default.