Oil prices fall amid rising U.S. crude inventories, demand concerns
Date
6/27/2024 4:22:21 AM
(MENAFN) On Wednesday, oil prices experienced a slight decline following an unexpected increase in US crude inventories, marking the third rise in four weeks. This development has fueled concerns about demand in the United States, the world's largest oil market. By 15:40 GMT, US West Texas Intermediate (WTI) crude futures had decreased by approximately 50 cents, or 0.6 percent, settling at USD80.33 per barrel. Similarly, brent crude futures fell by 39 cents, or 0.5 percent, to USD84.62 per barrel.
The US energy Information Administration reported a surprising increase of about 3.6 million barrels in the country's crude oil inventories for the week ending June 21. This rise caught analysts off guard, as they had anticipated a decline based on a poll. The unexpected boost in inventories has raised alarms among oil traders, particularly given the weak gasoline consumption in the US during the peak summer driving season.
Gasoline consumption in the United States, which accounts for roughly 10 percent of the world's total oil use, saw a 3.6 percent year-over-year decrease last week, dropping to around 8.9 million barrels per day. Despite refineries cutting back on production, fuel stocks still rose unexpectedly.
Additionally, the strength of the US dollar has exerted downward pressure on oil prices, as crude priced in dollars becomes more expensive for buyers using other currencies. This currency effect further complicates the outlook for oil demand and pricing dynamics in the global market.
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