(MENAFN- AzerNews) Oil prices declined on Thursday over the double whammy of an
unexpected build in US crude oil stockpiles and the ongoing COVID
restrictions in China, spurring demand fears.
International benchmark Brent crude cost $107.51 per barrel at
0759 GMT for a 1.17% decrease after closing the previous session at
$108.78 a barrel.
American benchmark West Texas Intermediate (WTI) traded at
$102.89 per barrel at the same time for a 1.30% loss after the
previous session closed at $104.25 a barrel.
A massive increase in US crude oil stocks drove the oil price
slump.
Crude oil inventories rose by 9.4 million barrels last week,
more than the market expectation for a rise of 1.4 million barrels.
Gasoline inventories, however, fell by 3.6 million barrels.
Signaling declining demand in the US, such a large inventory
build encouraged investors to capitalize on high price gains.
This move came amid demand fears in China, where the strict
COVID measures have prevented people from even leaving their homes
to buy food.
Prices have been put under pressure with the lengthy lockdown
and uncertainty over its duration despite the easing of measures on
Monday.
-Some 3 million barrels per day of Russian oil to be cut from
May
According to the International Energy Agency (IEA), Russia's oil
supply will fall by 1.5 million barrels per day (bpd) in April,
with shut-ins projected to reach around 3 million bpd from May.
The IEA noted that despite the magnitude of the Russian oil
supply disruption, weaker demand growth and steady output increases
from Middle East OPEC members, along with the US and other
countries outside the OPEC alliance (non-OPEC ), should prevent a
severe deficit from developing.
The OPEC group, in the meantime, is facing the widest supply gap
since May 20, when nearly 10 million bpd of supply cuts were
enforced to counter COVID-induced demand destruction.
The group's supply gap compared to official output targets in
March reached 1.5 million bpd.
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