Crude oil prices fell in a volatile session at the end of today, Wednesday, February 15 (2023), after the release of the US inventories report.
And raised a much larger-than-expected rise in US oil inventories, and expectations of higher interest rates, concerns about the possibility of weak demand for fuel and economic recession.
Crude oil prices today
At the end of the session, the futures prices for Brent benchmark crude – delivery in April 2023 – fell by 0.2%, to reach $85.38 a barrel, after it fell to less than $84 during trading.
The price of US West Texas crude futures – delivery in March 2023 – decreased by 0.6%, to $ 78.59 a barrel, according to data viewed by the specialized energy platform.
Crude oil prices ended their trading, yesterday, Tuesday, February 14, down by about 1%, after the US government announced its intention to release more of its strategic reserve stocks.
US oil stocks
US oil inventories rose by about 16.3 million barrels in the week ending February 10, according to the weekly report from the Energy Information Administration.
The increase was much larger than the 1.2 million barrel increase expected by 9 analysts polled by Reuters, likely indicating a drop in fuel demand.
Gasoline inventories rose by 2.3 million barrels, while distillate inventories decreased by 1.3 million barrels.
Analysts from Haitong Futures said: “The inventory data put increasing pressure on the oil market, as this will be the eighth week of building inventories.”
They added that tepid demand in the US market will continue to drive down crude oil prices in the near term, Reuters reported.
Economic recession
Meanwhile, a Federal Reserve official said on Tuesday that the US central bank will need to continue to raise interest rates gradually to beat inflation.
This came after data showed that US consumer prices accelerated in January.
“We now expect the FOMC to extend tightening through the second quarter, and we expect interest rate increases of 25 basis points at the FOMC meetings in May and June, in addition to the hike in March,” said ANZ analysts. The March we expected.
strategic oil reserves
Crude oil prices were affected by the US Energy Department’s announcement this week of its intention to sell 26 million barrels of the country’s Strategic Petroleum Reserve, which is at its lowest level in nearly 4 decades.
Crude oil prices received some support from the Organization of the Petroleum Exporting Countries (OPEC), as it raised its forecast for global oil demand growth for 2023 in its first upward revision in months, with China reopening and lowering supply forecasts for major non-OPEC producers, indicating Market tightening.
OPEC said that global oil demand will rise this year by 2.32 million barrels per day, or 2.3%, raising expectations from February by 100,000 barrels per day.
The International Energy Agency also raised its forecast for global oil demand growth to two million barrels per day this year, bringing the total to a record high of 101.9 million.
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