Crude oil prices fell during today’s trading, Wednesday, May 10 (2023), after 3 sessions of gains.
An unexpected rise in US oil inventories raised concerns about demand, and investors await US inflation data to gauge the next rate decision in the largest oil consuming country.
Crude oil prices today
By 07:07 AM GMT (10:07 AM Mecca time), Brent crude futures – for delivery in July 2023 – fell by 0.49%, to record $ 77.06 a barrel.
US West Texas Intermediate crude futures – for June 2023 delivery – also fell by 0.50%, to record $ 73.34 a barrel, according to data seen by the specialized energy platform.
And crude oil prices ended their dealings, yesterday, Tuesday, May 9, with an increase for the third consecutive session, with optimism about the demand for fuel during the summer.
demand for oil
US oil inventories rose by about 3.6 million barrels in the week ending May 5, in a possible sign of weaker demand.
Gasoline stocks also rose by 399,000 barrels, the American Petroleum Institute reported late on Tuesday.
The data contradicted the expectations of 8 analysts, polled by Reuters, regarding a decline in crude stocks by 900 thousand barrels and a decrease of 1.2 million barrels in gasoline stocks.
Government data from the US Energy Information Administration on oil inventories is due later on Wednesday.
“The sudden increase in US inventories, coupled with lower crude oil imports and weak export growth in China in April, exacerbated concerns about global oil demand,” said Priyanka Sachdeva, analyst at Philip Nova.
The market is awaiting the US Consumer Price Index figures for April, which is due to be released today, Wednesday.
New York Federal Reserve President John Williams said inflation remains very high and the central bank would raise interest rates again if necessary, though the Fed has dropped guidance on the need for future increases.
OPEC production
The market is also awaiting the monthly oil report from the Organization of the Petroleum Exporting Countries (OPEC), due out on Thursday, looking for clues as to whether the organization and its allies will need to cut production again to support crude oil prices.
And 9 countries from the OPEC + coalition announced, during the past month, an additional voluntary reduction in production by 1.6 million barrels per day from May until the end of the year, which raised the alliance’s cuts to 3.6 million barrels per day.
For its part, the Russian Energy Ministry said that the reduction in oil production in the country almost reached the target levels in April, according to Reuters.
Saudi Arabia, which has pledged to cut its production by 500,000 barrels per day starting in May, has told buyers in Asia that it will supply the full volumes of crude oil required for June.
Sources said that some Chinese refineries may have requested lower quantities of supplies, which would help the world’s largest oil exporter achieve its production cut target.
Canadian oil
In Alberta, Canada’s main oil-producing province, wildfires subsided on Tuesday thanks to cooler weather.
The wildfires forced oil and gas producers to stop producing at least 319,000 barrels of oil equivalent per day, or 3.7% of the country’s production.
Markets were also watching US President Joe Biden and senior Republican lawmakers about raising the US debt ceiling of $31.4 trillion, fearing an unprecedented default if Congress did not act within 3 weeks.
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