Oil gains as anticipated US oil stockpiles decline

14 Aug 2024 , 11:39 AM

Estimates of declining U.S. gasoline and crude inventories sent oil prices skyrocketing on Wednesday as investors braced themselves for a potential escalation of the Middle East conflict, which would limit the world’s oil supply.

Brent crude futures had increased 30 cents to $80.99 per barrel. The price per barrel of U.S. West Texas Intermediate crude jumped by 38 cents to $78.73.

According to market sources quoting American Petroleum Institute data on Tuesday, it was anticipated that U.S. crude oil and gasoline stockpiles would have decreased last week while distillate stocks would have increased.

Based on the API data, oil inventories fell by 5.21 million barrels in the week that concluded on August 9, the unnamed sources claimed. While distillates increased by 612,000 barrels, gasoline stockpiles decreased by 3.69 million barrels.

Reduction in inventory may be a sign of increased demand in the United States, the largest oil user in the world.

Later on Wednesday, the Energy Information Administration is expected to release official government data.

The market was also waiting for indications of Iran’s next course of action, as Tehran has threatened to respond harshly to the death of a Hamas leader late last month, which Tehran has attributed to Israel. Israel has not stated that it is involved or disputed it. To support Israeli defenses, the U.S. Navy has sent warships and a submarine to the Middle East.

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