An unexpected increase in US crude oil stocks of one-million barrels hints at weak demand, lowering prices of black gold
14 June 2023 - 08:14
by Agency Staff
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Oil prices inched lower on Wednesday after industry data showed an unexpected rise in US crude stocks, signalling weak demand to markets already worried about recession and disappointing Chinese economic data.
Brent crude futures eased 27c, or 0.4%, to $74.01 a barrel by 12.19am GMT. US West Texas Intermediate (WTI) crude was at $69.13 a barrel, down 29c, or 0.4%.
Both benchmarks climbed over 3% on Tuesday on hopes of rising fuel demand after China’s central bank lowered a short-term lending rate. Prices fell by 4% on Monday on concerns about the Chinese economy after disappointing economic data last week.
US crude oil stocks rose by about one-million barrels in the week ended 9 June, according to market sources citing American Petroleum Institute (API) figures on Tuesday, contrary to the average estimate for a 510,000-million barrel decline, according to analysts polled by Reuters.
Government data on stockpiles is due later in the day.
Market participants were also closely watching a Federal Reserve meeting, which has no predetermined rate hike on the table. Rate hikes strengthen the dollar, making commodities denominated in the US currency more expensive for holders of other currencies and weighing on prices.
With still-too-hot inflation riding their heels, but abundant uncertainty about both the economic outlook and the lagged effects of 10 rate hikes since March 2022, a breather from increases looks to be on the cards when the rate-setting federal open market committee (FOMC) meeting concludes Wednesday.
Economists expects the Bank of Canada to raise interest rates again in July to 5.00% after a surprise 25-basis-point (bps) increase last week.
The European Central Bank (ECB) is also expected to hike interest rates by another quarter percentage point on Thursday to tame stubborn inflation. But the Bank of Japan (BOJ), which will announce its plan on Friday, is expected to maintain its ultra-loose policy.
Meanwhile, Opec+ has granted Russia a slightly higher oil production baseline, meaning Russia can produce more under the latest quotas than previously agreed.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Oil dips on surprising US crude stock rise
An unexpected increase in US crude oil stocks of one-million barrels hints at weak demand, lowering prices of black gold
Oil prices inched lower on Wednesday after industry data showed an unexpected rise in US crude stocks, signalling weak demand to markets already worried about recession and disappointing Chinese economic data.
Brent crude futures eased 27c, or 0.4%, to $74.01 a barrel by 12.19am GMT. US West Texas Intermediate (WTI) crude was at $69.13 a barrel, down 29c, or 0.4%.
Both benchmarks climbed over 3% on Tuesday on hopes of rising fuel demand after China’s central bank lowered a short-term lending rate. Prices fell by 4% on Monday on concerns about the Chinese economy after disappointing economic data last week.
US crude oil stocks rose by about one-million barrels in the week ended 9 June, according to market sources citing American Petroleum Institute (API) figures on Tuesday, contrary to the average estimate for a 510,000-million barrel decline, according to analysts polled by Reuters.
Government data on stockpiles is due later in the day.
Market participants were also closely watching a Federal Reserve meeting, which has no predetermined rate hike on the table. Rate hikes strengthen the dollar, making commodities denominated in the US currency more expensive for holders of other currencies and weighing on prices.
With still-too-hot inflation riding their heels, but abundant uncertainty about both the economic outlook and the lagged effects of 10 rate hikes since March 2022, a breather from increases looks to be on the cards when the rate-setting federal open market committee (FOMC) meeting concludes Wednesday.
Economists expects the Bank of Canada to raise interest rates again in July to 5.00% after a surprise 25-basis-point (bps) increase last week.
The European Central Bank (ECB) is also expected to hike interest rates by another quarter percentage point on Thursday to tame stubborn inflation. But the Bank of Japan (BOJ), which will announce its plan on Friday, is expected to maintain its ultra-loose policy.
Meanwhile, Opec+ has granted Russia a slightly higher oil production baseline, meaning Russia can produce more under the latest quotas than previously agreed.
Reuters
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Bargain hunting pushes oil prices up
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