Oil prices sink slightly on API inventory data

An unexpected rise in US crude stockpiles weighs a bit on oil prices.
Photo: Bloomberg
Photo: Bloomberg

Oil prices slump after new data show an unforeseen rise in US crude inventories, reports Reuters.

Since closing trading hours Tuesday CET, oil prices have receded faintly.

A barrel of European reference oil Brent trades for USD 79.34 Wednesday morning against USD 79.38 Tuesday afternoon. US benchmark crude West Texas Intermediate sells concurrently for USD 73.34 relative to USD 74.46. 

On both Monday and Tuesday this week, oil prices regained some territory after taking a larger tumble thus far in 2023.

American Petroleum Institute data from Tuesday show an unexpected rise in US crude inventories during the first week of this year, the news agency cites API sources referencing.

A recent Reuters roll shows surveyed commodity analysts having forecast US crude stockpiles down by 2.2 million barrels. 

Investors keenly await conclusive stockpile data set for release later today from the US Energy Information Administration.

Oil prices is under further pressure from economic uncertainty in the US market and traders anticipating the Federal Reserve hiking dollar interest even higher as a part of efforts to tackle inflation.

Such a move could trigger a domestic recession and cut into fuel demand.

Demand from China, the world’s largest crude importer, remains stymied by Covid-19 restrictions, and forecasts also project European oil demand falling due to recession spurred by rising interest rates, say Senior Vice President Claudio Galimberti from Norwegian analysis frim Rystad Energy.

Thursday, US Consumer Price Index data on domestic inflation are scheduled for release, and figures lower than expected could have a weakening effect on the greenback relative to other currencies.

Such affects oil demand being that a weaker dollar makes crude purchases cheaper for holders of other currencies. 

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