Oil is almost flat as tighter US supplies and macroeconomic worries compete

25 Oct 2023 , 09:54 AM

On Wednesday, oil prices remained relatively unchanged due to indications of reduced U.S. supply, which offset negative economic news that cast doubt on the demand for energy.

U.S. West Texas Intermediate crude prices fell 5 cents to $83.69 a barrel, while Brent crude futures increased by 2 cents to $88.09 a barrel.

In the last three sessions, there has been a decline in the benchmark pricing.

Industry statistics, which cited American Petroleum Institute estimates, showed that U.S. oil supplies tightened by roughly 2.7 million barrels in the week that ended on October 20.

Later on Wednesday, the US government is expected to release inventory figures. 

Meanwhile, unexpectedly low business activity statistics for the euro zone this month raises the possibility that the region may enter a recession, which would negatively impact the outlook for oil demand.

According to readings, Germany appears to be experiencing a recession. A month after reporting a monthly decrease in activity, British firms are showing signs of recession ahead of the Bank of England’s interest rate announcement next week.

Investors also maintained a watch on the Middle East because they worry that escalating hostilities there could destabilise the oil market and cause supply disruptions.

In order to provide humanitarian relief to trapped Palestinian population, nations including the United governments, Canada, Russia, and Arab governments urged for a pause or ceasefire in the war between Israel and Hamas in the Gaza Strip.

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