Oil prices moved on Wednesday, with U.S. crude dropping for the third day. This occurred after an industry report showed that stocks at the Cushing delivery hub for the benchmark increased last week. Also, it jerked off a slip in overall inventories.
Brent crude fell 15 cents, or 0.2%, at $61.44 a barrel after acquiring two cents on Tuesday.
U.S. WTI crude settled down 18 cents, or 0.3%, at $55.36 a barrel. It dropped 0.5% in the previous session.
West Texas Intermediate delivery hub at Cushing, Oklahoma, surged by 1.2 million barrels, according to the API.
Asia Pacific market strategies said price action over the past 48 hours illustrates how quick traders are to regain fears about sluggish demand. Contrarily, there are expectations of more abundant supplies.
Demand concerns stayed strong amid the 16-month old U.S.-China trade war. This has hit economic growth around the world, weakening demand for oil.
China and the U.S. were continuing to work on a temporary deal. But it may not be accomplished in time for U.S. and Chinese leaders to sign it in November.
The latest possible setback in the negotiations hindered a rally in the global share markets.
The United States crude inventories dropped by 708,000 barrels during the week of Oct. 25th to 436 million. Also, analysts expect a rise of 494,000 barrels.
Gasoline stocks fell by 4.7 million barrels, compared with expectations for a decrease of 2.2 million barrels. Moreover, distillate stocks settled by 1.6 million barrels, versus an expected drop of 2.35 million barrels.
Russia’s energy minister says it was too early to talk of broader output cuts by OPEC and its partners. Also, it added weight to the market.
The OPEC+ cut oil production by 1.2 million barrels per day. This is to support prices since January.
Oil Prices Drop Amid Increasing Crude Inventories
Oil prices dropped in Asia after the API reported that U.S. oil inventories surged last week.
According to the API, crude inventories increased by around 600,000 for the week of Oct. 25th.
From Oct. 18th until this week, the API’s photograph recommended a crude build even bigger than the 2.2 million barrels. In the end, the official count was a drawdown of 1.7 million barrels.
The American Petroleum Institute data pointed out as headline for oil prices today.
U.S. crude oil WTI futures fell 0.5% to $55.28. Also, the International Brent oil futures dropped 0.9% to $61.06.
Analysts now anticipate that the Energy Information Administration’s government data to show an increase of 494,000 in crude inventories tomorrow.
Furthermore, oil prices were also curbed by lower demand growth for 2019 and 2020. The International Energy Agency or IEA expects this.
It is important to note that demand increased by 800,000 barrels a day in July and 1.4 million barrels a day in August. Besides, the IEA has decreased its report for demand growth in 2019 by 100,000 bpd to over 1 million barrels per day. Also, it reduced its report for 2020 by the same amount to 1.2 million barrels per day.