Oil prices decline as U.S. oil stocks increase

26 Jul 2023 , 11:02 AM

After industry data revealed an anticipated increase in U.S. crude stockpiles on Tuesday, oil prices dropped on Wednesday, down from three-month highs reached the day before. However, losses were contained due to signals of tighter global supply and expectations for China’s economic stimulus.

Brent crude futures had fallen 32 cents, or 0.4%, to $83.32 per barrel. American West Texas Intermediate (WTI) crude was down 28 cents or 0.4% at $79.35 per barrel.

In the week ending July 21, according to market sources citing American Petroleum Institute data on Tuesday, U.S. crude stockpiles increased by roughly 1.32 million barrels. A 2.3 million barrel drawdown was predicted by the analysts Reuters surveyed.

While distillate inventories increased by roughly 1.61 million barrels, gasoline inventories decreased by about 1.04 million barrels.

On Wednesday, U.S. government inventory data is due.

Prices dropped after Brent and WTI on Tuesday reached their highest levels since April 19 because to worries about tighter supply and promises from Chinese officials to support the second-largest economy in the world.

Most market players anticipate that the Fed will announce a 25 basis-point rate increase after the meeting closes on Wednesday. The Fed’s policy meeting began on Tuesday.

Oil prices have already secured four consecutive weekly advances, with crude supplies anticipated to tighten as a result of supply reductions by OPEC and allies.

According to the most recent government figures provided on Tuesday, Saudi Arabia’s oil exports decreased by about 40% in May from the same month last year.

The second-largest user of oil in the world, China, made a commitment to increase support for economic policy.

Given the first quarter’s robust economic activity, the International Monetary Fund marginally increased its projections for global growth in 2023 on Tuesday, but it also issued a warning that ongoing difficulties were dimming the medium-term outlook.

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