A three-month low is reached in oil prices due to indications of increased supply

8 Nov 2023 , 10:04 AM

On Wednesday, oil prices dropped to their lowest point in more than three months as conflicting Chinese economic data prompted concerns about the demand for petroleum throughout the world, while industry data revealed a sharp build-up in U.S. supply of the fuel.

U.S. oil prices slid 35 cents to $77.02 a barrel, while Brent crude futures declined 25 cents to $81.36 a barrel. In early Asia trade, both dropped to their lowest levels since July 24.

According to news reports, the American Petroleum Institute reported that U.S. crude oil stocks increased by over 12 million barrels during the previous week. 

Weekly inventory data will not be released by the U.S. Energy Information Administration (EIA) until the week of November 13.

The EIA predicted on Tuesday that while demand will decline, crude oil production in the US will increase this year by a little less than anticipated.

The EIA has reversed its earlier projection of a 100,000 bpd gain in petroleum consumption and now projects a 300,000 bpd decline in national petroleum consumption this year.

Data from China, the largest oil consumer in the world, cast doubt on the prognosis for demand.

The second-biggest economy in the world had strong rise in its crude oil imports in October, but its overall exports of goods and services shrank more quickly than anticipated, raising concerns about a decline in the demand for energy throughout the world.

A slight rebound in the value of the US dollar from recent lows, which increases the cost of oil for holders of foreign currencies, contributed to the pressure on oil prices.

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