Crude oil prices rose marginally during trading on Wednesday, April 26 (2023), in an attempt to reduce bleeding losses, after falling by more than 2% in the previous session.
Reports of declining crude oil and fuel inventories in the United States have refocused investors on strong demand in the world’s largest oil consumer.
Crude oil prices today
By 08:21 AM GMT (11:21 AM Mecca time), benchmark Brent crude futures – for June 2023 delivery – rose 0.21%, to $80.94 a barrel.
West Texas Intermediate crude futures – for June 2023 delivery – increased by 0.40%, recording $ 77.38 a barrel, according to what was seen by the specialized energy platform.
Crude oil prices ended their trading, yesterday, Tuesday, April 25, down by more than 2%, after two sessions of gains.
US oil stocks
US crude oil inventories fell by about 6.1 million barrels in the week ending April 21, according to market sources citing figures from the American Petroleum Institute.
Analysts had expected a decrease in US oil stocks by about 1.5 million barrels, according to Reuters.
The sources said that gasoline stocks fell by 1.9 million barrels last week, while distillate stocks rose by 1.7 million barrels. Official inventory data from the US Energy Administration is scheduled for release on Wednesday evening.
Crude oil inventories have been declining in the US since mid-March, as refineries ramped up operations to produce more gasoline ahead of the summer peak demand period that begins in May.
This pushed back WTI futures prices, when spot futures contracts are higher than later dated futures contracts, reflecting higher demand for the fuel.
“The decline in futures prices is in line with strong utilization rates, as refineries are now refining more crude oil in – and with – increasing demand for gasoline,” oil analyst Stephen Schork said in his newsletter.
Oil price analysis
Crude oil prices fell more than 2% on Tuesday, returning to near the same level before the Organization of the Petroleum Exporting Countries (OPEC) and other producer allies such as Russia, known as OPEC+, announced an additional production cut in early April.
China Galaxy Futures analyst Song Yang said the upward momentum generated by the OPEC cuts is running out, and Russia’s oil exports did not show any obvious decline, leaving the supply side without further support.
While American Petroleum Institute data pushed the market higher in early trading on Wednesday, persistent economic concerns and expectations of higher interest rates that may limit fuel demand growth contradict signs of improving consumption gains in the short term.
US consumer confidence fell to a 9-month low in April as concerns about the future escalated, raising the risk of the economy falling into a recession this year.
Investors also expressed concern that possible new interest rate increases by central banks fighting inflation could slow economic growth and weaken energy demand in the United States, Britain and the European Union.
The US Federal Reserve, the Bank of England and the European Central Bank are expected to raise interest rates at their next meetings.
Leave a Reply