As US oil stock builds, oil declines even more, allaying supply concerns

12 Oct 2023 , 10:26 AM

Oil prices continued to decline for a third session as supply concerns subsided and the U.S. stockpile of crude and petrol grew more than anticipated.

While U.S. West Texas Intermediate crude dropped by 49 cents, or 0.59%, to $83 per barrel, Brent futures declined by 41 cents, or 0.48%.

Most of the early-week gains on both benchmarks have been lost.

According to Wednesday’s data from the American Petroleum Institute and market sources, the amount of U.S. crude oil in storage increased by around 12.9 million barrels.

This was far more than the 500,000 barrel gain that economists predicted in a Reuters survey.

The data also revealed that petrol inventories increased by 3.6 million barrels, which was a sharp increase compared to the analysts’ expectation of an 800,000-barrel decline and fed concerns about slowing fuel demand in the United States. The markets will be awaiting additional inventory data cues from the U.S. Energy Information Administration (EIA), which is scheduled to release its report at 1430 GMT later today.

Prices were under downward pressure elsewhere as market worries over the Middle East supply issue continued to fade.

However, the U.S. EIA’s predictions of significant declines in global oil inventories in the second half of 2023 restrained price depreciation.

The EIA stated in a monthly report that the lower stocks, which are expected to maintain the global oil supply below consumption, are likely to increase oil prices.

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