Oil rates experience slight decline driven by surprise increase in US crude stockpiles
Date
6/27/2024 9:26:59 AM
(MENAFN) Oil rates experienced a slight decline on Thursday, influenced by concerns over a surprise increase in US crude stockpiles, which raised worries about weaker demand from the world's largest oil consumer. However, potential disruptions to Middle East supplies due to an escalation in the Gaza conflict provided some support to limit the declines, according to Reuters.
As of 9:35 a.m. Saudi time, brent crude oil futures were down 6 cents, or 0.1 percent, to USD85.19 per barrel, while US West Texas Intermediate (WTI) crude futures dropped 10 cents, or 0.1 percent, to USD80.80 per barrel. Both benchmarks had recorded slight gains in the previous trading session.
Senior economist Tsuyoshi Ueno from NLI Research Institute highlighted that market sentiment was affected by expectations of increased US crude oil and gasoline inventories, signaling potential weakening in demand. However, Ueno noted that the market was in a balancing act, supported by concerns that escalating tensions between Israel and Hezbollah could disrupt oil supplies from the Middle East.
The US Energy Information Administration's report showed a surprise build of 3.6 million barrels in US crude oil stocks last week, contrary to expectations of a 2.9 million-barrel decrease as polled by Reuters. Additionally, US gasoline stocks rose by 2.7 million barrels, surpassing analysts' forecasts of a 1 million-barrel drawdown.
Demand indicators were mixed, with product supplied for motor gasoline, a proxy for demand, declining by approximately 417,000 barrels per day to 8.97 million barrels per day. Despite this, the four-week average demand remains about 2 percent lower compared to the same period last year, reflecting ongoing uncertainties in global oil consumption trends amid economic fluctuations and geopolitical tensions.
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