(MENAFN) Oil rates declined on Wednesday following data indicating a rise in crude inventories in the US, the largest oil consumer globally.
At 09.31 AM local time (0631 GMT), the international benchmark Brent crude traded at USD82.64 per barrel, marking a 0.62 percent decrease from the previous session's closing price of USD83.16 per barrel. Similarly, the American benchmark West Texas Intermediate (WTI) traded at USD77.88 per barrel at the same time, reflecting a 0.64 percent fall from the previous session's closing at USD78.38 per barrel.
The decline in oil rates was driven by the release of data from the American Petroleum Institute (API) late on Tuesday, revealing a 509,000-barrel increase in US crude oil inventories, contrary to the market expectation of a draw of 1.4 million barrels. This surge in commercial crude oil reserves reflects perceptions of weakening domestic demand, exerting downward pressure on prices.
Further price reductions are anticipated if US Energy Information Administration (EIA) data, later released on Wednesday, confirms an inventory drawdown against estimates of a stock rise.
Additionally, the strengthening US dollar against other currencies, which rose by 0.12 percent to 105.54, somewhat mitigated the price decline by making oil more expensive for traders holding other currencies.
However, escalating geopolitical tensions at the Palestinian side of the Rafah border crossing due to Israeli attacks remain a significant factor influencing oil rates. The Yemeni Houthi group threatened to expand its attacks on shipping if the Israeli army invaded the city of Rafah in the southern Gaza Strip. These developments raise concerns in the market about potential intensification of conflicts in the Middle East, the primary oil-producing region, which could exert upward pressure on prices.
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