Oil prices decline in early trade

5 Jun 2024 , 08:50 AM

Early Asian trade on Wednesday saw oil prices decline. This on the back of  concerns regarding demand and increased US crude oil inventory.

Brent crude futures dropped 14 cents, or 0.2%, to $77.38 per barrel. At $73.07 per barrel, U.S. West Texas Intermediate crude futures dropped 18 cents, or 0.3%.

Both contracts saw losses of about a dollar on Tuesday and almost $3 a barrel on Monday as a result of the OPEC+ group’s announcement that it would boost production starting in October despite recent indications of slowing demand growth.

According to reports quoting data from the American Petroleum Institute, stockpiles of distillate, petrol and crude oil in the United States increased last week. Increasing stockpiles usually indicate that supply is meeting demand.

According to API data, oil stockpiles increased by over 4 million barrels during the week that ended on May 31, defying analyst predictions in a Reuters poll that showed a 2.3 million-barrel fall.

Additionally, petrol inventories increased by more than 4 million barrels, a far larger rise than the 2 million barrel gain that analysts had predicted.

On Wednesday at 1430 GMT, the U.S. Energy Information Administration will release official stockpile data.

Growing U.S. inventories may have a negative impact on investor perception of the need for oil. Data from the previous week shows how much petroleum was used during the Memorial Day weekend, which is much anticipated since it ushers in the American driving season.

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