After industry statistics revealed rising U.S. crude stockpiles, oil prices tumble

The market saw a slight decline in oil prices after industry data revealed that U.S. crude inventories unexpectedly increased last week, pointing to a potential slowdown in demand.

According to market sources quoting American Petroleum Institute data, U.S. crude stockpiles increased by around 2.2 million barrels for the week ending August 5. Analysts had predicted a modest reduction in crude inventories of 400,000 barrels.

On Wednesday, the official government data is due.

Futures for Brent crude decreased 6 cents to $96.25 per barrel. West Texas Intermediate futures for the United States fell 16 cents to $90.34 a barrel.

Tuesday’s turbulent trading session saw investors weigh recessionary worries with the news that certain oil exports on the Russia-to-Europe Druzhba pipeline that passes through Ukraine had been blocked.

A payment from Moscow for transit costs was unable to be processed due to Western sanctions, so Ukraine stopped oil flows on the Druzhba oil pipeline to several regions of central Europe.

While the northern Druzhba pipeline servicing Poland and Germany was unaffected, flows along the southern route were impacted.

The Druzhba pipeline company of the Czech Republic, MERO, predicted that Russian oil supplies to the country would resume in a few days.

Oil futures have recently been affected by worries about a potential global recession, but U.S. oil refiners and pipeline operators anticipate high energy use for the second half of 2022, according to a Reuters examination of business earnings calls.