Oil Prices Fall As US Stockpiles Increase; OPEC+ Output Levels Eyed By Investing.com | Old North State Wealth News
Connect with us

US News

Oil prices fall as US stockpiles increase; OPEC+ output levels eyed By Investing.com

Published

on

Investing.co — Oil prices fell Wednesday as industry data pointed to a sustained increase in U.S. inventories, implying demand from the world’s largest consumer is coming under pressure.

At 08:35 ET (12:35 GMT),  fell 1.2% to $82.12 a barrel, while fell 1.3% to $77.37 a barrel.

US oil inventories clock unexpected build – API

Data from the showed that U.S. oil inventories grew 0.5 million barrels in the week to May 3, confounding expectations for a draw of 1.4 million barrels.

“API numbers released overnight were moderately bearish due to stock builds in both crude and products,” analysts at ING said, in a note.

“While US crude oil inventories are estimated to have increased by only 500k barrels over the week, gasoline and distillate stocks increased by 1.5m barrels and 1.7m barrels respectively.  In addition, stocks at the WTI delivery hub, Cushing, grew by  1.3m barrels over the week.”

The data comes after U.S. inventories saw an unexpected, outsized build in the prior week, which spurred speculation that global oil markets were not as tight as initially expected.

The API data usually heralds a similar reading from , which is due later on Wednesday.

Strong U.S. supplies have undermined expectations of tighter global oil markets, especially as recent data also showed U.S. oil production raced back to record highs in February. 

OPEC+ to roll over supply output cuts? 

Cautious expectations on supply cuts from the Organization of the Petroleum Exporting Countries and its allies ahead of a June 1 policy meeting also weighed on markets.

3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or
remove ads
.

Russian Deputy Prime Minister Alexander Novak said on Tuesday that there had been no discussions about an oil output increase by OPEC+, a day after he was reported saying the group had the option of increasing production.

“Our oil balance suggests that there is no need for a full rollover of the 2.2m b/d of cuts. Instead, a partial rollover should be enough to keep the market balanced for the remainder of the year,” ING added. “However, recent price action increases the risk that full cuts are rolled over, which in turn increases the risk of OPEC+ overtightening the oil market later in the year.”

Middle East tensions persist, Israel-Hamas ceasefire uncertain 

Israel kept up its offensive against Rafah on Tuesday, while also seizing a key main border crossing in the city. 

The move came even as Hamas officials reportedly accepted a new ceasefire proposal for Gaza – one that Israel rejected. Hamas also expressed ire over Israel’s attacks on Rafah, and that the strikes largely undermined any progress towards a truce.

Still, U.S. officials said a ceasefire could still be reached, as delegates from both sides met in Cairo for negotiations.

The prospect of continued geopolitical unrest in the Middle East presented some support to oil prices, amid bets that the unrest will disrupt supplies in the oil-rich region.

(Ambar Warrick contributed to this article.)



Read the full article here

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Trending

Copyright © 2022 ONSWM News. Content posted on the Old North State Wealth News page was developed and produced by a third party news aggregation service. Old North State Wealth Management is not affiliated with the news aggregation service. The information presented is believed to be current. It should not be viewed as personalized investment advice. All expressions of opinion reflect the judgment of the authors on the date the articles were published. The information presented is not an offer to buy or sell, or a solicitation of any offer to buy or sell, any of the securities discussed.