Global crude oil news

19 Oct 2022 , 09:36 AM

Early on Wednesday in Asian trading, oil prices increased, reversing losses from the previous session, as worries about restricted supply due to news of falling US inventory outweighed concerns about declining demand from top oil importer China.

Brent crude futures were up 73 cents, or 0.8%, at $90.76 per barrel. U.S. West Texas Intermediate crude was up $1.13 or 1.4% to $83.95 per barrel. On Thursday, the front-month contract for WTI expires.

In the previous session, news that U.S. President Joe Biden intended to release more barrels from the Strategic Petroleum Reserve (SPR) and concerns over waning Chinese gasoline demand caused Brent and WTI to hit two-week lows and drop 1.7% and 3.1%, respectively.

According to market reports citing American Petroleum Institute data on Tuesday, U.S. crude oil stocks decreased by around 1.3 million barrels for the week ending October 14.

According to an extended Reuters poll released on Tuesday, U.S. crude stocks were predicted to have risen by 1.4 million barrels in the week ending October 14 for a second straight week.

The U.S. Department of Energy's statistical division, the Energy Information Administration, is required to submit inventory data by Wednesday at 10:30 a.m.

The Organization of the Petroleum Exporting Countries (OPEC) and other producers, including Russia, came to an agreement earlier in October to drastically reduce oil production by 2 million barrels per day.

The decision by the group of oil producers was unanimous, according to OPEC's secretary-general, despite charges from the White House that Saudi Arabia had pressured some countries into supporting the action.

The OPEC+ production cut, which occurs before a European Union oil embargo, will limit supply in a competitive market. The restrictions imposed by the European Union on Russian oil will go into force in December and in February, respectively.

The Biden administration intends to release additional oil from the SPR to fill the shortfall and lower petrol prices ahead of next month's midterm elections.

According to a senior U.S. official, the government intends to sell the final 15 million barrels of the 180-million-barrel oil release it announced earlier this year in December.

The EU's emergency oil reserves, which include crude oil and petroleum products, modestly increased in July after two coordinated releases reduced them to record lows in June, but they remained 3.7% lower than in July 2021, according to data released on Tuesday by the bloc's statistics office.

Fears of decreased Chinese gasoline consumption as a result of China's continued adherence to its strict zero-COVID policy restrained oil price rises.

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