Oil prices are unchanged in early trade

12 Jul 2023 , 12:29 PM

As production curbs by the world’s largest oil producers and expectations for increased demand in emerging nations countered concerns that an economic slowdown would increase U.S. crude stockpiles, oil prices were mostly flat in early Asian trade on Wednesday.

Brent futures were down 4 cents at $79.36 per barrel, while West Texas Intermediate (WTI) oil prices were down 1 cent at $74.82.

U.S. crude stocks increased by around 3 million barrels in the week leading up to July 7, according to market sources quoting data from the American Petroleum Institute. This helped to keep prices in check. Reuters polled analysts, who anticipated a rise in crude stockpiles of 500,000 barrels.

It would be the first gain in oil stock in four weeks if verified by Energy Information Administration statistics released later on Wednesday. This is in contrast to a 3.3 million barrel increase in the same week last year and a 6.9 million barrel average decline over the previous five years.

Oil increased by around 2% in the previous session, helped by a declining US dollar and expectations for rising petroleum demand worldwide.

According to the International Energy Agency (IEA), the second half of 2023 should see further tightness on the oil market due to high demand from China and other developing nations as well as recently announced production curbs, particularly those by major exporters Saudi Arabia and Russia.

The U.S. EIA forecast demand would outstrip supply by 100,000 barrels per day (bpd) in 2023 and by 200,000 bpd in 2024.

Markets were looking for hints about the future of interest rates in the U.S. inflation statistics released on Wednesday. Higher rates can impede economic expansion and lower demand for oil.

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